IT IS true what they say: the rich and powerful rise to the top, the also-rans struggle for scraps from the table. The Premier League, in 2017-18, generated record revenues of £ 4.8 billion, an increase of 6% over the 2016-17 season. While this hints at a healthy, affluent league, it should be noted that the gap between the top six clubs and the rest is very significant, a gulf that is also mirrored in the points generated by the elite clubs in 2028-19.
The top six clubs by revenue will surprise nobody, but what is alarming is the difference between the sixth highest club by income, Tottenham (£ 428 million) and seventh-placed Everton (£ 212 million). Align that with the 2018-19 points tally of Manchester United in sixth position (64 points) and Wolves in seventh (51 points) and it merely confirms the theory that the Premier League, for all its hype, is a series of leagues within leagues.
According to Deloitte, the Premier’s 20 clubs made a combined profit of £ 400 million, slightly down on 2016-17 but the fourth time in five years that a collective pre-tax profit has been made by the league.
However, look more closely and the overall health is probably not quite so rosy, despite the enormous TV fees and prize money. Almost all of the profit was made by the top six clubs, meaning that the majority were not profitable in 2017-18. Liverpool (£ 125 million) and Tottenham (£ 139 million), posted world record profits for football clubs.
Success comes at a cost, though, and Premier League wages were up by 15% to £ 2.9 billion. Media reports suggest that Manchester United’s wage bill is 2017-18 was the highest in the Premier at £ 296 million with Liverpool next at £ 263 million. Tottenham’s is said to be £ 160 million, more than £ 60 million lower than north London rivals Arsenal.
Interestingly, with Liverpool, Tottenham, Arsenal and Chelsea all enjoying long European campaigns, the 2018-19 season should see their UEFA revenues climb considerably. Tottenham will also surely move up a gear with the opening of their spectacular new stadium.
The increase in players’ wages impacted clubs’ operating result, with a small decrease to under £ 900 million. The wage-to-revenue ratio increased to 59%, up from 55% (a 19-year low due to the boost from year one of a broadcasting cycle). While 59% is the aggregate figure, almost half of Premier clubs recorded a wage-to-revenue ratio of 70% or more.
The wage increase was not totally unexpected as the 2017-18 season saw two record transfer windows with Premier spending almost touching £ 2 billion. This may be a short-term phenomenum, however, as broadcasting rights, which account for around 60% of total Premier income, may have plateaued and could only marginally increase in the future. There are already signs in the transfer market, with the current season’s expenditure falling to around £ 1.4 billion. The big question is whether the Premier League has peaked and reached saturation point?