Premier League clubs made a combined loss of £600 million in the 2018/19 season, even before suffering the financial pain of the coronavirus pandemic, a report revealed on Tuesday.
Analysis from football finance experts Vysyble shows the 20 clubs in the English top-flight combined to post the huge loss despite record revenues of £5.15 billion ($6.6 billion)
The financial impact of COVID-19 is set to have a huge impact on the Premier League, even if plans to complete the current season behind closed doors go smoothly.
Premier League sides face paying a reported £330 million to broadcasters in rebates as matches could not be completed on schedule.
An estimated £126 million could also be lost in matchday income from gate receipts and hospitality.
“The COVID-19 virus is not the cause of football’s financial distress. It is merely the accelerant on what our data has very clearly and very correctly identified as a much longer-term problem,” said Vysyble director Roger Bell.
“The 2018/19 numbers are a disturbing and profoundly worrying financial outcome from England’s senior football divisions and is symptomatic of the deeper issues with the overall financial model.”
Wage costs for Premier League clubs have risen to £3.12 billion.
Everton posted alarming losses of £111 million, while Chelsea’s failure to qualify for the Champions League saw the Blues lose £96 million.
Yet the most worrying sign for the future financial health of the league may come from Tottenham.
Spurs posted a league-high profit of £68.6 million for the 2018/19 season on the back of a run to the Champions League final.
But the London club announced last week they had borrowed £175 million from the Bank of England.
They fear they could lose £200 million over the next year due to the loss of matchday income, cancellation of non-football events such as NFL matches and concerts and rebates owed to broadcasters.
“Our data has consistently demonstrated that football has been the master of its own misfortune with an over-reliance on TV revenues, staff cost-to-revenue ratios regularly in excess of safe operating limits (UEFA guidance recommends 70 per cent) and a failure to recognise key financial dynamics and trends,” added Bell.
The economic outlook for the Championship is also bleak.
Four Championship clubs have yet to release their full 2019 accounts, but the second tier of English football has so far combined for economic losses of £307 million.
The final economic loss total for all 24 EFL Championship clubs is expected to be at least £350 million.