The big bucks behind the Premier League
With an AED27 billion TV deal putting Premier League clubs into profit for the first time in 15 years, we drill down into the finances of the richest league in the world.Peter Iantorno April 8, 2015
Last week something truly momentous happened in the Premier League. It wasn't Queens Park Rangers scoring four goals away from home, nor was it Charlie Adam's stunning goal for Stoke against Chelsea from inside his own half - no, the most amazing thing that happened in the Premier League last week was the announcement that for the first time in 15 years, the 20 teams belonging to it turned a profit.
Yes, while its clubs might be falling further and further behind their European counterparts on the pitch, off the field things are looking positively rosy. According to figures by financial analysts Deloitte, the combined pre-tax profits of the Premier League clubs in the 2013-14 season came to £190 million (more than AED1 billion) - an incredible increase after combined losses of £316 million the year before.
How did this happen? Well, the bottom line is that revenues rose 29 per cent, from £2.5 billion to £3.3 billion, yet average wages increased by only 6 per cent, from £1.8 billion to £1.9 billion. That adds up to a 58 per cent revenue-to-wages ratio - the lowest since the 1998-99 season, when the clubs were last collectively in profit. This may suggest that the Premier League is scaling back the big-money salaries it was once famous for - a theory that is backed-up by a quick look at the world's top earners list. While Manchester United's strike pair of Robin Van Persie and Wayne Rooney do feature, they are only in fifth and seventh, earning £18.9 million and £16.6 million respectively, and the only other Premier League entrant in the top 10 is Chelsea's Eden Hazard, who banks £13.3 million per season. The top four earning players in the world are Paris Saint-Germain's Thiago Silva, Real Madrid's Cristiano Ronaldo and the Barcelona pair of Neymar, who came third, and Lionel Messi, who raked in an estimated £48 million last year to take number one spot ahead of Ronaldo.
While this does suggest a shift in spending power from the Premier League and into Europe, the most telling financial statistics are not the league's highest earners, but those that fly quietly under the radar. If we ignore the financial anomalies that are the super-rich European powerhouses of Barcelona, Real Madrid, Paris Saint-Germain and Bayern Munich, the lesser teams in the European leagues don't pay anywhere near as much as the Premier League's middle men.
For example, Tottenham pay reserve striker Emmanuel Adebayor a jaw-dropping £111,000 per week, Liverpool pay their second-choice right back Glen Johnson £90,000 per week and even relegation-threatened QPR can afford to pay midfielder Joey Barton, who seems to spend more time on Twitter than he does on the football pitch, £70,000 per week. Of course, the main source of income for Premier League clubs that allows even the relegation candidates to hand out huge contracts, is the astronomical fees they charge broadcasters for the rights to screen matches on live TV. The current deal, which started in 2013 and expires in 2016, is worth just over £3 billion, however, last month a new deal for the 2016-19 rights was struck with broadcasters Sky and BT Sport, worth an outrageous £5.136 billion - meaning that Sky will be paying £11 million for every single game it shows.
This sounds like awful value for money, but we need look back only a few hours to last night's match between Aston Villa and QPR for an example of why it's not. Both teams have been terrible for most of the season, yet they produced a pulsating 3-3 draw in the desperate fight against relegation. The league is so unpredictable and exciting, it's no surprise that some of the biggest stations in the world, including Eurosport and Qatar's BeIn Sports, were all clamouring to gain exclusivity.
It may be true that the Premier League can't attract the truly elite players - the Cristiano Ronaldos and Lionel Messis of this world - any more, and yes, Sky and BT Sport have paid an absurd amount that may not necessarily seem like good business. But for entertainment value, passionate fans and sheer unmissable drama, the Premier League is in a class of its own - and you can't put a price on that.