English football clubs are entering a new era of moneymaking, according to accountancy firm Deloitte, with aggregated revenues likely to exceed £4 billion (£5.8 billion) next season — more than double the £2 billion they were making just nine years ago.
The firm’s Annual Review of Football Finance, says that much of this increase is down to far more lucrative Premiership TV deals, with 2014/15 revenues for the league reaching £3.3 billion ($4.8 billion).
This is set to go up even more next season as broadcasters Sky and BT have agreed to a deal that will pay £1.8 billion ($2.7 billion) a year for three seasons.
Less established clubs have also benefitted from new Premiership distribution rules that state 50% of UK broadcast revenue is to be split equally between the 20 clubs. This increase is just one of the reasons a team like Leicester City can compete with bigger clubs and defy the odds to win the league.
England’s top football league will only get more popular overseas too, generating £1.1 billion per season from international broadcasting rights from next season. 31% of this will come from Asia, a continent that is getting more and more interested in football, with another 31% coming from the rest of Europe, Deloitte says. More than half of next year’s Premier League sides are owned by foreign investors.
China is a market that looks to be particularly lucrative for English football. As football in China grows in popularity, the interest in the Premier League from the country will inevitably increase, Deloitte’s report adds. There is already some Chinese involvement in the league, after China Media Capital purchased a stake in City Football Group, which owns Manchester City.
Elsewhere, the “Big 5” leagues of Europe — in England, Spain, Italy, Germany and France — drove overall revenues in the continent to €22 billion (£17 billion; $25 billion), representing 54% of the total European market. The Premier League dominates this arena, making twice the revenue of Italy’s Serie A league and three times that of Germany’s Bundesliga.
Dan Jones, a partner a Deloitte, told the BBC that Premier League clubs were now becoming viable businesses worth investing in:
We feel Premier League clubs have turned the corner and are entering a new era of sustained profitability. Clubs are now attractive propositions to investors, and not merely as vanity projects.
The impact of the Premier League’s broadcast deal is clear to see. For the first time, the Premier League leads the football world in all three key revenue categories – commercial, match day and broadcast – and this is driving sustainable profitability
He added that Premier League players’ astronomical wages — which now take up 61% of total revenues — shouldn’t be a cause for concern, saying that ” in the last two years, only 30% of revenue increases have been consumed by wage growth, whereas in the five years to 2012-13 this figure was 99%.”