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Premier League football clubs relied on player sales worth £1bn in an effort to balance the books last season, as rising costs and a cooling media rights market exposed stubborn financial fragilities within the world’s richest league.
Filings by 18 of the elite English league’s 20 clubs show a sharp jump in aggregate profit last season from selling players in the transfer market.
The final number generated by player sales is set to top £1bn for the 2023-24 season, up from roughly £700mn for all 20 a year earlier. Yet those same clubs are set to post another year of aggregate losses due to rising costs while player wages remain elevated, the accounts show.
The figures highlight the ongoing difficulties teams in the richest league in football have in trying to make a profit despite receiving billions of pounds of revenue.
Revenues, not including player trading, rose north of £6.2bn for the 19 clubs that have reported figures so far. However, clubs slumped to a loss after tax of roughly £130mn, according to data provider Football Benchmark. Losses narrowed from £713mn across 20 clubs the prior year thanks to the jump in profit from player sales.
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Premier League clubs are reporting further losses at a critical juncture for the sport, which has seen an influx of investment from around the world in recent years. The UK government is due to create an independent regulator designed to foster financial sustainability, while the Premier League is planning to bring in a new rule book with similar aims. Top executives at several clubs have recently warned that football’s entrenched habits of overspending must end.
This week, Tottenham Hotspur reported a loss of £26mn for last season after failure to reach the Champions League led to a drop in prize money and TV income.
“I often read calls for us to spend more, given that we are ranked as the ninth richest club in the world. However, a closer examination of today’s financial figures reveals that such spending must be sustainable in the long term and within our operating revenues,” chair Daniel Levy said this week in a statement accompanying the club’s results. “We cannot spend what we do not have.”
Nottingham Forest, owned by Greek shipping magnate Evangelos Marinakis, made an operating loss of £73mn, although player sales worth more than £100mn led to an overall profit of £12.1mn. Aston Villa made a loss of £85.4mn, compared with a loss of £119.6mn a year earlier.
Some teams have so far only published headline figures for the 2023-24 season. Among them was Chelsea, the London club co-owned by US private equity firm Clearlake Capital, which reported a profit of £128mn. However, that figure was boosted by selling assets worth almost £200mn — including Chelsea’s women’s team — to the club’s parent company and profits from player sales of £152mn, suggesting another year of steep operating losses.
Chelsea is one of a number of clubs that have opted to offload young players to meet the Premier League’s profit and sustainability rules, which penalise clubs for losing more than £105mn over a rolling three-year period, although the figure used by the league for these purposes differs from numbers used by the club in its accounts. Money brought in by selling players produced from a club’s youth academy can be booked as pure profit. Since acquiring the club in 2022 for £2.5bn, Chelsea’s US owners have assembled a squad at a cost of more than €1.6bn, according to European governing body Uefa.
Several clubs had already posted their financial results for last season, including reigning champions Manchester City. The club reported a profit of £73mn last season, thanks to net income from player sales of £139mn.
Crosstown rival Manchester United, which is US-listed, has recently been on a cost-cutting drive after reporting record losses last year of £113mn. “We have lost a lot of money for the past five consecutive years. This cannot continue,” Omar Berrada, United chief executive, said in February as he announced a fresh round of job cuts.
The Premier League has attracted a wave of investment in recent years, with more than half the teams in the division now owned by US funds or wealthy individuals. However, rising player wages, transfer fees and financing costs have made it hard for most clubs to generate profits. The pending increase in employer national insurance contributions is set to add tens of millions of pounds in costs from this month.
The league has sought to clamp down on overspending. Last season two clubs, Everton and Nottingham Forest, were docked points for failing to stay within permitted losses, while Leicester City escaped punishment by moving the date of its financial year.
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The Premier League is now discussing a switch to new financial rules that would focus on revenue rather than losses. The “squad cost ratio”, which restricts spending on players as a portion of income, would mirror regulations brought in last year by Uefa.
A separate idea, dubbed anchoring, would link the amount the richest team could spend as a multiple of the bottom team’s TV income. Both systems have been trialled this year, although clubs have delayed formally adopting either for at least another year.
Football’s principal revenue stream comes from selling live TV rights. However, the media market for European football has cooled recently, with some leagues renewing contracts at reduced rates. The Premier League was able to eke out a 4 per cent rise for its next four-year cycle — but only by offering a 40 per cent jump in the number of games being aired.
Owners of several clubs have instead turned to match day income — ticket sales and premium hospitality — to drive future growth. According to analysis by the Financial Times, Premier League clubs plan to add more than 100,000 in stadium capacity in the coming years.
Meanwhile, the focus on generating windfalls in the transfer market has sharpened in recent years, with four English top-flight clubs — Chelsea, Manchester City, Brighton & Hove Albion and Nottingham Forest — each making profits on player sales of more than £100mn.
“Player profits have become very important because of stricter regulations,” said Football Benchmark founder and chief executive Andrea Sartori. “Even top Premier League clubs have been forced to improve their financial sustainability to comply with Premier League and Uefa regulations.”
