Football
John Brewin, ESPN FC 7y

Premier League clubs losing an average of £876,000 per day - study

Premier League clubs are living beyond their means, and are squandering the vast TV revenue they receive.

Those are the findings of financial analysis experts Vysyble, who estimate that, between them, clubs lose an average of £876,000 every single day, and are failing to meet the ever-increasing costs of wages and transfers.

Using the accounting principle of "economic profit," as employed by companies like Coca Cola, Gillette and Lloyds Bank, where all the costs of doing business are accounted for, Vysyble say they have the most transparent view possible of clubs' financial health and have released a reported entitled "We're So Rich It's Unbelievable! -- The Illusion Of Wealth Within Football."

Vysyble's Roger Bell said: "Financially, football is failing. Britain's biggest football clubs are spending much, much more than they are making. The Premier League, and [Executive Chairman] Richard Scudamore, should be very worried."

Should TV companies like Sky and BT, who together pay £5.14 billion to show matches in the UK from 2016 to 2019, and the Premier League's worldwide global broadcasters, who pay £3.2bn, offer less next time around, then that could threaten the future of English football's top division.

Each TV deal since the Premier League formed has seen an increase of around 70 percent, but with viewing figures falling, as consumers' habits change, and the threat of pirate illegal streams, there may soon come a point when broadcasters can no longer afford such increases.

Bell suggested that the Premier League's top seven clubs Chelsea, Tottenham, Manchester City, Liverpool, Manchester United, Arsenal and Everton might then be tempted to look towards a European Super League.

Vysyble's John Purcell, in a telephone conversation with ESPN FC, said that the acceleration in spending has been fired by the heavy investment of billionaire benefactor clubs like Chelsea and City, and the vast sums invested in player recruitment by Manchester United since Sir Alex Ferguson retired four years ago.

He said: "They went on an enormous spending spree. And you have got to compete as a club. City are slapping down £200 in the poker game where before clubs were playing with a tenner and it puts a huge financial stress on other clubs."

Purcell also suggested that the Premier League's TV deal from 2013, which expired last year, hastened spending across the board.

He said: "£3bn came in, a new wall of money and that made people relaxed about spending."

Vysyble calculate that with transfer fees and salaries spiralling, clubs increased economic losses by 5,555 percent year-on-year from £5.66mi in 2013-14 to £320.08m in 2015-16. With many Premier League clubs on course to break their transfer records this summer, there appears little sign of such spending being reined in.

Purcell also suggested that Arsenal could be struggling to keep up with their rivals, due to the club failing to grow like their peers, in financial terms as well as on the field of play.

"Arsene Wenger gets a hard time over finances but their position has been deteriorating. Arsenal had the lowest rate of revenue growth among the Premier League's mainstays. He would love to spend money, but they haven't got it. Arsenal used to be the second-highest revenue generator behind United, but they were overtaken by City in 2013-14."

United made £515m in revenue in 2016, while City took £391m to Arsenal's £353m. Meanwhile, Liverpool made £301m to Chelsea's £298m.

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