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It is that time of year for us to draw conclusions in the world of football. Like accepting that Manchester City are now as good as it gets in Europe. Or that Jack Grealish is partial to an all-nighter.

And here’s another one: football is a boom industry and at the very heart of its expansion is the Premier League.

Deloitte’s Annual Review of Football Finance has been published and its forensic analysis details that just shy of €30billion (£25.6bn; $32.5bn) was generated by European clubs across the 2021-22 season. Covid-19 might have applied the brakes but the accelerator is back to being squeezed with growth of seven per cent year on year.

The European football market has expanded by almost €10billion since 2012-13 — a billion for every season, if you like — and central to the continued uplift is the Premier League. All by itself, English football’s top division now generates €6.4billion (£5.5bn) per year. Spain’s La Liga, its nearest competitor, only just turned over half of that sum last season.

In the women’s game, the upward trajectory is even steeper, with 60 per cent growth year on year in the English Football Association’s Women’s Super League.

Deloitte’s 32nd Annual Review depicts a sport with a widening appeal and enduring interest levels post-pandemic, but also reveals devils in the detail. Revenue growth is being outpaced by wage increases and operating profits are also in decline.

The Athletic assesses the key points of Deloitte’s findings.

Premier League vs European rivals

If European football is a playground, there is an overgrown, dominant child still calling all the shots. The Premier League has become a behemoth, towering over the continental rivals it used to chase.

Of the €17.2billion generated by Europe’s big five leagues (England, Spain, Germany, Italy and France), over a third of that was the combined revenue of the Premier League’s 20 clubs. Spain’s La Liga and Germany’s Bundesliga put together cannot match the Premier League’s financial might.

In every metric there is a dominance that the rest of Europe believes has turned unhealthy. Commercial revenues outstrip every other league, while the Premier League’s €901million of matchday revenues is close to four times that of Italy’s Serie A.

And then there is the greatest competitive advantage of all. The English top flight generated €3.49billion through TV revenues in 2021-22: more than Bundesliga, Serie A and Ligue 1 lumped together thanks to enormous broadcasting deals at home and overseas.

Read more: How Premier League TV rights work

The playing field is not just skewed but on a steepening gradient. Although every European league has seen growth in the last decade, none have been on the scale of the Premier League, whose revenues have more than doubled since 2012-13. In the same period that the Premier League recorded growth of over €3billion, Italy’s Serie A has only found an additional €680million.

That has been increasingly manifested in the transfer market, where £2.7billion was spent by the Premier League’s 20 clubs in 2022-23.

Do not expect the yawning gulf to close any time soon, either. Deloitte have projected revenue growth in the Premier League across this season and next but in Italy and France there is an expectation that incomes will broadly flatline.

“What the Premier League has really managed to do where the other leagues haven’t is accelerate that international picture,” says Chris Wood, assistant director in the Sports Business Group. “It’s the most watched league, broadcast into pretty much every country around the globe. That’s reflected in the TV revenue deals. We might be seeing the domestic broadcast deals flatline a little bit but the growth in international markets is still continuing.”

The Premier League is due to publish its breakdown of distribution for 2022-23 in the coming weeks. That will provide the first clear glimpse of increasing revenues, with a new overseas broadcast deal coming into effect at the start of 2023-24.

It has been forecast that Manchester City, as title winners again, will bank in the region of £186million from the Premier League, up on the £153m of the previous campaign. Placed in context, that alone will be equivalent to the average annual revenue of two Ligue 1 clubs.

Speaking of financial gulfs, there is one that continues to stand: between the Premier League’s ‘Big Six’ and the rest. Driven by Manchester City’s record-breaking turnover of £619million in 2021-22, Liverpool, Manchester United, Chelsea, Tottenham and Arsenal combined to generate £3.9billion between them. That sum amounted to 56 per cent of the Premier League’s total income.

Newcastle United’s takeover by Saudi Arabia’s Public Investment Fund promises to make that six a seven in years to come but the current disparity is clear.

West Ham United, who enjoyed handsome returns from a run to the Europa League semi-finals last season, were seventh in the Premier League’s turnover table with a £255million but they were barely a dot in sixth-placed Arsenal’s wing mirror. Even without European football, Mikel Arteta’s side still had revenues of £368million. Tottenham, in fifth, had £443million.

Those benefits mean the Big Six’s share of wage costs increased one per cent to 52 per cent, with an additional £192million spent on wages across the division. In layman’s terms, for every £1 spent on wages by Premier League clubs, 52p of that goes to a footballer playing for Manchester United, Manchester City, Liverpool, Spurs, Arsenal or Chelsea.

The point of no return?

The line graphs that compare the Premier League to other European leagues effectively serve as an endorsement to the agitators and those calling for reform.

English football’s top division has driven off into the sunset as a vehicle for generating revenue and that reality is what motivates Europe’s elite in their attempts to claw back ground they currently ceded to the likes of Bournemouth and Crystal Palace. Regulatory changes, most notably to UEFA’s Financial Sustainability Regulations, are considered a must.

They do not like the ominous direction of travel and the foreseeable future offers little encouragement that the Premier League’s powers will diminish. The greater the revenue, the more there is to spend on the best players; the type who amplify interest and make all those TV companies write the big cheques. Round and round it goes.

“We don’t have to look back too far to see a period of domination from Spanish clubs and a little further back the Italian clubs,” explains Wood. “These things are cyclical but, in revenue terms, the Premier League clubs are so far ahead. The big driver of that is broadcast revenue and that’s not going to fall off a cliff any time soon.

“It wouldn’t necessarily be about closing that revenue gap but concentrating on their product, what they’re offering to fans and attracting new ones. Taking risks to catch up with the Premier League is something we definitely wouldn’t recommend. We’ll see the big names every year, like Real Madrid, still competing.”

Climbing wages and operational losses

For all football’s growth, there are warning signs that endorse the need for financial reform. Aggregate revenue might have increased from €27.6billion in the Covid-19-hit season of 2020-21 to €29.5bn last term but a 15 per cent rise in wage costs over the last four years is an indication of where it is being spent.

Average wages across the English top flight climbed to €215million per club last season, according to Deloitte. The next highest was €119million in La Liga.

Read more: Premier League wages: Growth, top earners, tax and why they are paid weekly

That expenditure has contributed towards operating profits (results excluding player trading) declining by €1.8million since 2018-19. Only seven Premier League clubs were able to report a pre-tax profit last season, with an aggregate loss of £607million. That represented a reduction on the previous season’s figure of £707million.

Not that these numbers ever dissuade investors. The pandemic has, in fact, emboldened those keen to join football’s growth, showing it to be a durable industry that will not be easily knocked off course. Revenues across the board took a hit in 2019-20 and 2020-21 but then came bounding back once supporters clicked through turnstiles.

“The way football has come through the pandemic has been really impressive and what we’ve seen in the last few years and, in particular, the last 18 months is the investment coming into football,” explains Wood.

“It’s all types at all different levels. Whether it be institution, private equity or sovereign wealth funds.

“A big reason for that is the investors have taken note of how resilient the sport has been through the pandemic, the greatest economic shock we’ve experienced in recent times. Football is almost seen as an asset class and that’s one of the attractions of investing in sport.”

Women’s football on the rise

The numbers are still dwarfed by those in the men’s game but nothing is moving at the pace of women’s football.

Deloitte included numbers from the Women’s Super League for the first time in its Annual Review and detailed a 60 per cent growth year on year. Aggregate revenues climbed to £32million in 2021-22, leaping up from the £20m of 2020-21. That, in part, came from the new TV deal struck with Sky Sports and the BBC for last season.

Read more: How the WSL’s TV deal will ‘monster the whole thing up’

The figures do not include the impact felt by England winning the European Championship last summer, including the expected jump in commercial revenues.

Revenues for the four highest revenue-generating clubs — Arsenal (£6.9million), Chelsea (£6.4m), Manchester United (£5.1m), and Manchester City (£4.1m) — accounted for 70 per cent of the league’s total revenue but spiked matchday revenues for 2022-23, the season that follows these figures, has already guaranteed further growth.

 (Top photo: Martin Rickett/PA Images via Getty Images)



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