Business as usual in the English Premier League

There might be a global pandemic going on and concern for the commercial future of sport around the world, but you’d be fair to assume that it’s all business as usual in the English Premier League – literally.

However, research shows that Premier League clubs spent less than a fifth of their expected cumulative 2020/21 revenue during the recent window. Clubs’ collective net-spend of £830 million was a “relatively sustainable” 17-18 per cent of revenue says Chris Winn, football finance expert and academic at UCFB’s Global Institute of Sport (GIS).

However, the net-spend of clubs was around £200 million more than 2019’s summer window, despite the gross total being c.£170 million less this time around.

Chris, who previously co-authored the Deloitte Annual Review of Football Finance, said: “Even allowing for no match-day revenue this season in a worst case scenario, potential broadcast rebates and the commercial hits due to lack of fan exposure, I’d still expect the Premier League to generate at least £4.5 billion-£5 billion total revenue this season as it stands.”

Chris continued, “Whilst the significant gross spend by Premier League clubs affirmed the notion of this summer being a buyers’ market, it is also important to note that transfer fees are often paid in instalments over time – so these levels of spend are not immediate cash payments here and now. Clubs will hope that future payments will be made in better times, and are often supplemented with future performance related terms to limit potential future liability.”

Chris leads the on-campus and online MSc Football Business programme at GIS – the Master’s degrees and executive education arm of University Campus of Football Business (UCFB). UCFB delivers undergraduate degrees in the football and sports industry at its UK campuses in London and Manchester, which feature Wembley and Etihad stadiums at their heart

In 2018/19 (the latest period for which financials are available), match-day

revenue only accounted for around 13 per cent (£680 million) of overall club revenue in the English top flight, slightly below the net spend figure paid out by clubs this summer, with broadcast and commercial deals being far more generous towards club coffers. Thirteen of the seventeen consistent Premier League teams spent less this summer compared to last, with nine clubs reducing net-spend. Only three clubs ended the summer in profit – Crystal Palace, West Ham United and Brighton.

The so-called ‘big six’ contributed c.£650 million of the £1.24 billion gross spent this summer – 53 per cent. Last summer this was just over 40 per cent. However, this summer’s spend is heavily skewed by the backing Frank Lampard was given at Chelsea following their transfer ban last term. The Londoners spent over £220 million this summer – almost 18 per cent of the league gross spend – on the likes of Kai Havertz, Timo Werner and Ben Chilwell.

Commenting on the spending spree from Premier League clubs this summer, Chris added: “A lot has been said about spending responsibly in the current environment, but clubs need to continue to invest to compete at that level. In the top flight if clubs are relegated, or don’t qualify for Europe when expected to, it can have huge financial consequences, as well as impacting the ability to attract future talent. Historically, there’s often a very strong correlation between spending and success in the Premier League.”

How much did the recently revealed Project Big Picture play a part in the thinking of clubs during the window, especially the ‘big six’? Perhaps we will never know, but it appears that the Premier League train will continue to roll on whatever the circumstances.

UCFB is a world first in higher education, offering university degrees in the football and sports industry. UCFB provides an exceptional environment to live and learn in, with state-of-the-art facilities in two inspirational campuses in London and Manchester, which have the iconic Wembley and Etihad stadiums at their heart. U