![\"\"](\"http:\/\/irishexaminerusa.com\/wp\/wp-content\/uploads\/2019\/04\/2.28375165-1.jpg\")
Premier League clubs made record revenues last season but rising wages cut into profits as \u2018the big six\u2019 continued to pull away from the pack in financial terms.<\/p>\nPremier League clubs made record revenues last season but rising wages cut into profits as \u2018the big six\u2019 continued to pull away from the pack in financial terms.<\/p>\n
With all of last season\u2019s accounts now filed at Companies House, financial analysts Deloitte and Vysyble have compiled reports looking at the overall picture in England\u2019s top flight.<\/p>\n
The headline figures are that overall turnover reached \u00a34.8bn in 2017\/18, up \u00a3200m on the season before, but the combined wage bill rose by \u00a3400m to \u00a32.9bn, with the average league wage\/revenue ratio rising from 55% to 59%.<\/p>\n
This meant operating profits fell 16% to \u00a30.9bn and the overall pre-tax profit slipped to \u00a30.4bn from 2016\/17\u2019s record figure of \u00a30.5bn.<\/p>\n
But the real story behind these numbers is the yawning chasm between Arsenal, Chelsea, Liverpool, Manchester City, Manchester United and Spurs, and everyone else.<\/p>\n
According to Deloitte, the increase in revenue is \u201cin part attributable\u201d to all bar Arsenal from the big six playing in the Champions League last season \u2013 a record for the league in terms of the number of clubs in Europe\u2019s most lucrative competition \u2013 and all five of them reaching the last 16. This significantly boosted those clubs\u2019 broadcast, commercial and match day turnover.<\/p>\n
Furthermore, Spurs\u2019 relocation to Wembley enabled the north London side to increase their hospitality, ticketing and sponsorship income. This enabled them to post world record post-tax profits of \u00a3113m last season, just beating Liverpool\u2019s profit of \u00a3106m for the same period.<\/p>\n
In fact, Spurs contributed more than half of the league\u2019s entire match day revenue growth and nearly a quarter of its commercial growth, while Liverpool and Spurs combined for 58% of the league\u2019s total pre-tax profit.<\/p>\n
When you add Arsenal, Chelsea and the two Manchester clubs to the mix, the contrast with the rest of the league gets starker.<\/p>\n
According to Vysyble, the big six accounted for 89% of the league\u2019s pre-tax profits, \u00a3401m, up from 36%, \u00a3179m, in 2016\/17.<\/p>\n
The six richest clubs earned more than \u00a353.4m a week between them, up from \u00a348.4m, while the remaining 14 combined to earn \u00a339.4m a week, down \u00a3200,000 on a year before.<\/p>\n
The gap between the sixth and seventh clubs ranked by turnover \u2013 Spurs to Everton \u2013 grew from \u00a377m to \u00a3192m, and the revenue gap from the top to the bottom \u2013 Manchester United to West Brom \u2013 was \u00a3465m, the widest it has ever been.<\/p>\n
And this is before the distribution model for the league\u2019s international broadcast rights is changed from next season to give the big six an even bigger share of the pot.<\/p>\n
\u201cThe big six are clearly tightening their financial grip around the Premier League ahead of the redistribution of international media revenues which will be weighted in their favor,\u201d explained Vysyble\u2019s John Purcell.<\/p>\n
\u201cFor the other 14 clubs, the ability to compete comes with an increasing financial burden as indicated by the rising cost of talent and more worryingly the increased deployment of capital by owners which has resulted in an overall decline in economic profitability.<\/p>\n
\u201cThis is a significant change in the divisional financial dynamic and is not one for the better given the already clear financial imbalances between (the big six) and the rest.\u201d<\/p>\n
Deloitte\u2019s analysis was more focused on the cost of talent and it noted that nearly half of the league was spending at least 70% on salaries.<\/p>\n
Tim Bridge, a director in Deloitte\u2019s Sports Business Group, said: \u201cThe increased wage expenditure was expected given the busy transfer market in the 2017\/18 season, with two record windows driving estimated Premier League gross spend of \u00a31.9bn.<\/p>\n
\u201cHowever, with the total value of rights expected to only marginally increase in the 2019\/20-2021\/22 broadcast rights cycle, increases in wage and transfer expenditure may be expected to slow in the medium term, as already signaled by the reduced estimated \u00a31.4bn gross transfer spend in the current season.<\/p>\n
\u201cWith 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.\u201d<\/p>\n