All reached the round of 16 or further, and as such there was a substantial increase in UEFA distributions to Premier League clubs. Deloitte reported this increase at approximately £71m.
Operating profits across the league, however, fell 16%. The drop was largely due to high wage bills, with a combined pay expenditure of £2.9bn.
Dan Jones, partner at Deloitte and head of its Sports Business Group, commented, “We have seen clubs’ wage expenditure increase at a faster rate than revenue growth in 2017/18. This is the same pattern as observed in the second year of the previous Premier League broadcast cycles, as clubs continue to invest in playing talent.”
The wages/revenue ratio, this year at 59%, is the lowest outside the first year of a broadcast rights cycle since 1998/99.
As a result of high wage expense, overall operating profit is at £0.9bn, compared to the previous season’s £1bn. As Deloitte pointed out, that most-recent figure is still the second-highest in Premier League history.
Commercial revenue also grew, as did match day revenue. More than half of the latter was a result of Tottenham Hotspur’s move to Wembley Stadium, and their new kit deal with Nike.
Spurs, Arsenal, and Liverpool, together contributed over 75% of the total pre-tax profit. There was also, however, an increase in the number of clubs that reported a pre-tax loss.
Tim Bridge, director of the Sports Business Group, said, “The increased wage expenditure was expected given the busy transfer market in the 2017/18 season, with two record transfer windows driving estimated Premier League gross spend of £1.9bn.”
He added, “With the emphasis now on clubs to generate revenue growth from sources other than central broadcast distributions, it may be that we see the levels of pre-tax profit diminish over the next few years.”