Consulting firm Deloitte reported on Thursday reported that the 20 Premier League clubs have got their acts together, and collectively they made a profit for the first time in 15 years.
Mike Ashley – thumbs up – yes I’ll spend the money
The combined profits of all 20 PL clubs before taxes was £190M for the financial year 2013-2014 – the last one available.
The figures also show that the clubs have finally got a handle on their biggest cost – the players wages – and in 2012-2013 those wages were 71%on average, and last year they had been reduced to 58%, which is the lowest ratio for fifteen years.
The other way to show this is that revenues rose at a much faster pace than wages last year, and there was a massive 29% increase in revenues due to it being the first year of the new £3B TV deal, which ends next summer.
Alan Switzer of Deloitte’s Sports Business Group said this to Sky Sports News after the figures were released:
“Financial Fair Play has definitely played a key part,” “It’s important to note that’s for clubs wanting to play in European competition, but on top of that the Premier League has also introduced cost-control regulations, so they’ve had a part to play for all the clubs in the Premier League.”
“We certainly don’t expect to see a return to the significant losses we’ve seen over the last decade. At an operating level, so that’s before player trading, all but one of the clubs made a profit, so that’s a huge turnaround from what we’ve seen.”
“It’s filtering all the way through and the huge size of the Premier League now, the advantage they have over their European rivals, means it’s perfectly possible for all those clubs to operate profitably.”
Now that the PL clubs are making big profits we think the wage ratio will increase in this financial year – because the PL clubs will be able to get better players at higher wages, but the revenue remains unchanged for the next two years on the current 3B TV deal – including this financial year which ends on June 30th.
And then of course, as announced earlier this year, the TV deal will increase next summer to a massive £5.1B for three years – a massive 70% increase from the current deal.
That means wages could increase 70% and maintain the same wages to revenue ratio.
Where’s my boots?
We are hoping Newcastle start to spend some of their profits this summer, and there is a good likelihood that it could (will) be the biggest transfer window for many years, and certainly the biggest since Mike Ashley bought the club back in the summer of 2007.
Certainly the money is available to spend.
Note: Mark Hammell is an avid reader of the blog and he has signed up for 7 endurance events totaling over 600 miles, after he has just recovered from a serious ACL injury.
Mark is doing this to raise money for the Sir Bobby Robson Foundation. Here is Mark’s Justgiving page – see if you can help him out and help Bobby’s Foundation.
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