Premier League soccer clubs have depended on sales of players worth £ 1 billion ($ 7.5 billion) in an effort to balance the bills last season, as growing costs and a cooling media market have exposed persistent financial weaknesses within the richest league in the world.
Documents from 18 of the 20 clubs in the English elite show a sharp leap in last season’s aggregate profit by selling players in the transfer market.
The final number generated by players’ sales is expected to exceed £ 1 billion for season 2023-24, compared to approximately 700 million (R $ 5.2 billion) for all 20 clubs in the previous year. However, these same clubs should record another year of aggregated losses due to increased costs, while players’ salaries remain high, show the bills.
The numbers highlight the continuous difficulties that teams in the richest soccer league face when trying to make a profit, despite receiving billions of pounds in revenue.
Revenues, excluding players’ negotiation, rose to more than £ 6.2 billion (R $ 46.7 billion) for the 19 clubs that have reported numbers so far. However, the clubs recorded losses (after taxes) of approximately 130 million (R $ 981 million), according to the Football Benchmark data provider.
The negative result of the 20 clubs was £ 713 million (R $ 5.3 billion) the previous year, and the reduction of red was possible thanks to the jump in sales of players.
Premier League clubs are reporting more losses at a critical time for the sport, which has seen an influx of investments from around the world in recent years. The UK government must create an independent regulator designed to promote financial sustainability, while Premier League plans to introduce a new rules book with similar goals. High -ranking executives of several clubs have recently warned that excessive football spending habits should end.
This week, Tottenham Hotspur reported a loss of £ 26 million last season after the failure to reach the Champions League, which led to a crash drop in money and TV revenue.
“I often read requests to spend more, as we are classified as the ninth richest club in the world. However, a more detailed analysis of today’s financial numbers reveals that such spending should be sustainable in the long run and within our operating revenues,” President Daniel Levy said this week in a statement that accompanies club results. “We can’t spend what we don’t have.”
Nottingham Forest, owned by the Greek Magnata of Navigation Evangelos Marinakis, had an operational loss of £ 73 million, although sales of players worth more than £ 100 million (R $ 754 million) have led to a general profit of £ 12.1 million (R $ 91.3 million). Aston Villa had a loss of £ 85.4 million (R $ 643.5 million) compared to a loss of £ 119.6 million in the previous year.
Some teams have so far published only main numbers for season 2023-24. Among them was Chelsea, the US-owned London Clear-owned club Clearlake Capital, which reported a profit of £ 128 million (R $ 966 million). However, this number was driven by the sale of assets worth nearly £ 200 million (R $ 1.5 billion)-in order to the Chelsea women’s team-to the club’s mother company and sales of £ 152 million players (R $ 1.1 billion), suggesting another year of major operational losses.
Chelsea is one of several clubs that have chosen to get rid of young players to comply with Premier League’s profit and sustainability rules, which penalize clubs for losing more than £ 105 million in a continuous period of three years, although the number used by the league for these purposes is different from the numbers used by the club in their accounts.
The money raised by selling players produced by a club’s youth academy can be registered as pure profit. Since purchasing the club in 2022 for £ 2.5 billion (R $ 18.8 billion), US owners have set a cast at a cost of more than € 1.6 billion (R $ 10.3 billion), according to UEFA.
Several clubs had already released their financial results for last season, including current champion Manchester City. The club reported a profit of £ 73 million last season, thanks to net sales revenue of £ 139 million players.
The city’s rival Manchester United, who is listed in the US, recently started a cost cutting campaign after reporting records last year of £ 113 million ($ 852 million). “We have lost a lot of money in the last five consecutive years. This cannot continue,” said Omar Berrada, United’s executive director in February, announcing a new round of job cuts.
Premier League has attracted a wave of investments in recent years, with more than half of the teams now owned by American fund or rich individuals. However, the growing salaries of players, transfer rates and financing costs have made it difficult for most clubs to make a profit. The imminent increase in the contributions of the employer’s national insurance should add tens of millions of pounds in costs this month.
The League sought to repress excessive expenses. Last season, two clubs, Everton and Nottingham Forest, were penalized with the loss of points because they did not remain within the permitted losses, while Leicester City escaped punishment after changing the date of their financial year.
Premier League is now discussing a change to new financial rules that would focus on revenue rather than loss. The “cost ratio of the cast”, which restricts spending on players as a part of the revenue, would mirror the regulations introduced last year by UEFA.
A separate idea, nicknamed anchoring, would turn on the amount that the richest team could spend as a multiple of the weaker team’s TV recipe. Both systems were tested this year, although clubs postponed the formal adoption of any of them for at least another year.
The main source of football revenue comes from the sale of live TV rights. However, the media market for European football has recently cooled, with some alloys renewing contracts at reduced rates. Premier League has achieved a 4% increase for its next four -year cycle – but only offering a 40% jump in the number of games broadcast.
Owners of various clubs, instead, resorted to the revenue of days of play – tickets and premium hospitality – to boost future growth. According to a Financial Times analysis, Premier League clubs plan to add over 100,000 places to stadium capacity in the coming years.
Meanwhile, the focus on generating revenues in the transfer market has intensified in recent years, with four English first division clubs – Chelsea, Manchester City, Brighton & Hove Albion and Nottingham Forest – each making profits from sales of more than £ 100 million players.
“Players profits have become very important due to more rigorous regulations,” said Andrea Sartori, founder and executive director of Football Benchmark. “Even Premier League’s main clubs were forced to improve their financial sustainability to comply with Premier League and UEFA regulations.”
