New figures have shown why owning a Premier League football club is so valuable.
While the Glazer family look set to relinquish their majority stake in Manchester United in the coming weeks, there has been much buzz around the prospect of them retaining a minority position in the Red Devils as they seek to continue to have a hand in in the continued success. of the world’s most successful football league.
In the case of Liverpool, while the owners Fenway Sports Group formalized a search for investment at the end of last year, and tried to sell a minority stake in the Reds, the intention was to keep the club, which they have owned since 2010, while finding ways to securing the necessary capital for future growth and ensuring they remained part of the elite group that has dominated the Premier League and the European landscape for some time.
This search for investment is not over and the club’s owners continue to assess their options when it comes to bringing fresh capital on board, but the latest figures published by sports group Deloitte show why FSG have little appetite to part with the reds and why there is so much interest in acquiring Premier League football clubs from individuals, groups and sovereign wealth funds from around the world. The Premier League continued to outperform the competition and maintain its position as the clear market leader, with member clubs reporting a 12 per cent increase in total revenue in the 2021/22 season, culminating in a record total revenue of £6.4 billion. bn). That was a number greater than both Spain’s La Liga and the German Bundesliga combined.
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La Liga revenue remains at around half that of the Premier League, despite La Liga clubs’ combined revenue rising 11 per cent to €3.3bn. (£2.83 billion) in the 2021/22 season. The easing of COVID-19 restrictions towards the end of 2021 helped top Spanish clubs generate total matchday revenues of €409m. EUR (£350m) in 2021/22, an increase of €353m the clubs’ total revenue. Second only to La Liga, the total revenue generated by Bundesliga clubs grew by five percent to 3.1 billion. EUR (£2.66bn) in 2021/22, as a result of improved matchday revenue (up €254m) and commercial revenue (up €169m).
Following a fall in the value of domestic and international broadcast deals, Serie A was the only ‘big five’ league to record a drop in total revenue in 2021/22, as total revenue fell by seven percent (€171m ) to 2.4 billion In contrast, France’s Ligue 1 clubs saw the biggest percentage growth in total revenue of the ‘big five’ leagues in 2021/22, rising 26 per cent (€412m) to a record €2bn. EUR. This growth was mainly driven by new commercial deals and a post-pandemic boost to matchday revenue.
Overall overall revenue growth across the ‘big five’ was outpaced by a 15 per cent increase in labor costs from 2018/19 to 12.3bn. EUR in the 2021/22 season, which caused the operating profit to fall by 1.8 billion. EUR since 2018/19. ‘Big five’ clubs reported a loss of €324m in the 2021/22 season, although this was a slight improvement on the 2020/21 season (a loss of €400m).
Tim Bridge, senior partner in Deloitte’s Sports Business Group, said: “The focus for all clubs must now shift to ensure long-term financial sustainability across the football system and the introduction of new rules across European football is appropriately timed to support This Record growth in the Premier League continues to increase income polarization between and within European football leagues, and all leagues face new challenges, arising from increased competition, regulation and the strain of a challenging macroeconomic climate.
“With the phasing in of UEFA’s financial sustainability rules from 2022/23, European clubs and leagues are placed at the crossroads of some of the most decisive regulatory changes the game has ever seen and a wave of investment in global football in a bid to challenge the established system And with new leagues looking to expand their offerings and secure the best in talent on the pitch, the future of European clubs may depend on how solid their financial foundations will be and whether they can use it to stay competitive and relevant.”
The 12% rise in Premier League clubs’ revenue in the 2021/2022 season can largely be attributed to record match-day revenue as fans returned to stadiums, alongside commercial revenue also reaching a record high.
Matchday revenue for the Premier League rose to £763m in 2021/22, an increase of £732m on the 2020/21 season, which was played behind closed doors. This also exceeded pre-pandemic levels of £684m. in the 2018/19 season, with an average league attendance at a record high (39,950). Commercial revenue also benefited from fans’ increased appetite for the game following forced time away, increasing by £245m. (16 per cent) to reach a new high of £1.7bn.
Total labor costs rose for the second consecutive year in 2021/22, rising six per cent to £3.6bn. Seven of the 17 consistent clubs reported a reduction in wages. This wage growth (£192m) was outpaced by the increase in revenue (£586m), resulting in the league’s wage/income ratio falling for the second consecutive season (67 per cent, down from 71 per cent). Despite this, the average wage/revenue ratio of Premier League clubs remains above pre-pandemic levels (2016/17 to 2018/19 average: 58 per cent).
The clubs’ operating profit (excluding player trading) totaled DKK 459 million. pounds in 2021/22, which is a decrease of 1 million. pounds compared to the previous season, which had seen an increase for the first time in four years. Despite overall revenue growth (£586m) outpacing wage increases (£192m), an increase in operating costs (£395m) contributed to a net reduction in operating profit. Cumulative losses for Premier League clubs were £607m. in 2021/22, a significant drop from the 2017/18 season when pre-tax profits were £427m.
The Premier League clubs’ net debt fell by 34 percent to 2.7 billion. pounds (20/2021: £4.1bn) at the end of 2021/22, with the new owners’ acquisitions of Chelsea and Newcastle United being a reason for this reduction.
Bridge added: “Growing international interest and the commercial prowess of playing in the English top flight continues to drive revenue growth. As new owners join the top tier and cost regulations continue to evolve, sustainable operations, funding models and acting with integrity should , as a football club’s guardians, remain uppermost in the minds of all stakeholders to ensure the longevity and ultimate success of the Premier League and its member clubs.”
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