Premier League leads European financial dominance but Championship clubs ‘living beyond their means’

Premier League revenue growth has continued to outpace that of its main European rivals, according to an eagerly-awaited report that also warns Championship sides are “living beyond their means”.

Deloitte’s annual review of football finances showed that combined club revenue in England’s top tier rose by 12% to a record £5.5bn during the 2021/22 season.

The report said it was largely attributable to record matchday revenue as fans returned to stadia after COVID-19 pandemic restrictions.

It also credited commercial revenue reaching an all-time high.

The study showed that the annual increase in wage growth, of £192m to £3.6bn, was outpaced by the increase in revenue for the second consecutive season.

The Premier League’s financial performance, it said, helped drive revenue in the “big five” European leagues – also including Bundesliga, La Liga, Serie A and Ligue 1 – up by a combined 10% to €17.2bn (£14.7bn).

That was only slightly higher than in the previous year.

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La Liga revenues remained at approximately half that of the Premier League, Deloitte said, despite the Spanish clubs’ total revenue rising by 11% to €3.3bn (£2.8bn) to maintain second spot in the financial league table.

La Liga officials have long bemoaned the Premier League’s financial clout but its clubs often account for the biggest transfer deals, with Real Madrid confirming just on Wednesday a potential £115m signing of England star Jude Bellingham from Borussia Dortmund.

Tim Bridge, lead partner in Deloitte’s sports business group, said of the report: “Topline figures show that European football has emerged resiliently from its most challenging period to date.

“Following the lifting of COVID-19 restrictions, fans’ pent-up demand gave rise to record matchday and commercial revenues across Europe.

“However, with operating profits declining by €1.8bn since 2018/19, it’s clear that overall recovery is still a work in progress.”

The wealth of the Premier League has actually created pressure on it to bolster the money it gives to the lower leagues to help them bridge the gap.

A new independent regulator was announced earlier this year.

The combined revenue for clubs across the English Football League – including the Championship, League One and League Two – was more than £1bn in the 2021/22 season.

Championship clubs recorded a total revenue of £676m, an increase of £76m (13%), Deloitte calculated, helped by falling wage costs.

But it added: “Despite the decrease, wages remained higher than the revenue earned by clubs in the division for the fifth consecutive year, with a wage/revenue ratio of 108%.”

Mr Bridge said: “The net debt of Championship clubs remains significant, with a vast number of clubs increasing their loans over the 2021/22 season.

“The glamour of Premier League promotion is spearheading the continual drive for investment in Championship clubs, often in an unsustainable manner, driving some clubs to overstretch financially.

“It is critical that long-term decisions are now made by clubs’ owners, and with the introduction of the Independent Regulator, focus will turn to improving the distribution mechanism of revenues between the leagues and clubs.

“This must be accompanied by appropriate governance and financial controls to ensure that any proposed solution is suitable and sustainable.”