World-renowned financial firm, Deloitte, says the English Premier League (EPL) remains the most lucrative and financially buoyant football league globally, and is expected to surpass the five billion euros barrier by the end of the 2017/18 season.
This is due to a massive rise in broadcast rights value, unprecedented global viewership, a new UEFA distribution system, and expanding sponsorship; making the English premiership more valuable than the leagues of France, Germany, Italy and Spain.
In its latest Annual review of football finance released in London, Deloitte revealed that the premier league’s new three-year broadcast rights cycle, which commenced at the start of the 2016/17 season resulted in an average c.45% rise in central distributions to club sides, compared with the 2015/2016 season.
Speaking with Voice of Nigeria from London, Chris Stenson, senior consultant at Deloitte Sports Business Group, said the continuous financial growth of the EPL should not be surprising, as the report also reflected a rise in wages, which rose to 3 billion euros, a double the total spent by any of the other “Big Five” leagues.
“We would expect to see another substantial increase in wages in 2016/17, with average broadcast rights distribution per club increasing by around £38m”, he said.
Premier League clubs’ combined operating profits saw a slight decrease, to €683m, with a number of clubs looking to get ahead of the competition by spending on playing talent – and consequently wages – in advance of the new broadcast cycle.
Impressively, 17 of the 20 Premier League clubs recorded an operating profit in 2015/16, and the results for 2016/17 may show every Premier League club generating an operating profit for the first time.
The average revenues of Premier League clubs competing in the Champions League were almost £400m in 2015/16.
This was mainly due to the return of Manchester United to Champions League football and the impact of the new UEFA broadcast rights cycle, which resulted in a significant increase in distributions to clubs.
The six clubs who qualified for the group stages of UEFA competitions accounted for almost 80% of Premier League clubs’ total commercial revenue in 2015/16, demonstrating the enduring commercial appeal of continental football to sponsors.
Deloitte also noted that Premier League clubs continued to lead the world in terms of transfer expenditure in 2015/16, spending over £1.3 billion (gross) on player acquisitions. Almost £900m (66%) of this was spent with overseas clubs, and £77m (6%) to acquire players from Football League clubs.
Five clubs recorded additions to player registrations in excess of £100m, including Newcastle United (£115m) despite their relegation.
Manchester City spent over £175m on players: a new record for a Premier League club in a single season.
Twelve clubs spent more than £50m (compared with seven clubs in 2014/15), boosted by the knowledge of significant guaranteed revenue increases in 2016/17 season, due to the Premier League’s improved broadcast rights values.
Mr. Stenson also noted that the appeal of the English game is further enhanced by its expanding global audience, powered by new broadcast rights arrangements.
“There has been significant growth in international rights values in recent broadcast rights cycles. In total, international rights are currently worth over £1 billion per season, c.40% of the total value of the Premier League’s broadcast rights values”.
He noted that Asia would play a big role in the league’s expansion.
“We expect to see further growth in the value of international rights in future cycles, and that Asian broadcasters will play a large role in this given the size of the Premier League’s fan base in Asia and the desire to watch live Premier League football.”
Following the launch of the Chinese Super League (CSL) with the backing of some of the wealthiest Chinese business concerns, some observers had warned that the dominance of the English game, and indeed the other big leagues on the financial front could be under threat.
This is due to the recent influx of quality football talent (and some of the world’s most expensive coaches) with huge monies making these transfers a reality, much to the shock of the global football fraternity.
Deloitte’s report showed that in their 2016/17 winter transfer window, Chinese Super League clubs spent more than £300m on players, more than any other league in the world and around £100m more than English Premier League clubs spent in the January 2017 European window.
But Mr. Stenson however believes the CSL still has some catching up to do, with the premiership likely to maintain its top position.
“We would not expect the CSL to displace any of the big five European leagues in the near future. There continues to be a lot of interest in China’s growing investment and influence in football, in both domestic clubs’ in playing squads inn infrastructure, and outbound overseas clubs acquisitions and sponsorships in the global game. However, there have been some significant developments in recent months, including new caps on foreign player numbers, player salaries and transfer fees, and tighter regulations on outbound mergers and acquisitions, which could constrain outbound Chinese investment in the rest of the world’s clubs and players in future seasons,” he added.