Combined losses among Premier League clubs in the 2022-23 season grew by 16% despite a rise in revenues to £6 billion for the first time, according to a closely watched annual analysis of football’s finances.
The report from Deloitte’s Sports Business Group showed pre-tax losses for top flight clubs of £685m during the period – a season won by Manchester City.
Salaries and costs associated with player transfers were blamed for the red number.
Sustainability concerns also continue to dominate the English Football League (EFL) Championship.
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There was some progress as salary expenditure fell below revenue for the first time since 2016-17.
But the combined performance resulted in operating losses of £316m despite a 10% rise in revenue to £749m for second division clubs.
Deloitte said parachute payments from the Premier League accounted for £200m of that sales figure.
The report has been published at a time when football’s finances remain in the spotlight, amid a series of bitter disputes between Premier League clubs and league chiefs over financial fair play rules.
EFL sides are also still fighting for a bigger slice of the pie of the top layer.
Although the study focuses on the financial position of the league’s clubs during 2022-23, Everton and Nottingham Forest had a combined 12 points last season.
The penalties were related to breaches of the Premier League’s Profitability and Sustainability Rules (PSR), which measure impermissible losses.
Manchester City are also concerned about a series of allegations from the league relating to their revenue reporting history – allegations which they vehemently deny and intend to dispute.
The club moved to sue the Premier League in response.
The PSR will remain in place next season while the new financial regulations are tested in the shadows.
Squad cost rules (SCR) will limit spending on items such as salaries, agents and transfer amortization fees to 85% of revenue, while top-down anchoring (TBA) limits the amount any club can spend on costs related to the team. five times the lowest predicted central payment for a club that season.
Clubs in the top five tiers of English football also remain subject to licensing conditions imposed by an independent regulator.
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This is because the Conservatives, Labor and Liberal Democrats each committed to creating a statutory body to protect the financial sustainability of English professional football in their election manifestos.
It comes after the failure to agree the terms of the so-called New Deal for the EFL, which could have seen just over £900 million handed over to the lower professional divisions by the Premier League over a six-year period.
The Deloitte report showed growing revenues for Europe’s top leagues and some progress in reducing the wage-to-revenue ratio in the so-called big five – the Premier League, La Liga, Bundesliga, Serie A and Ligue 1 in France.
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Tim Bridge, senior partner in Deloitte’s Sports Business Group, said: “The 2022 FIFA World Cup, the lifting of final COVID-19 restrictions and the fervor of fans involved in football have led to strong growth in the European football market. football in 2022/23.
“As plans and conversations continue between the leagues in terms of further regulation and investment, European football is at an inflection point.
“Football is becoming an increasingly globally connected game, and this brings new challenges to maintaining competitive balance, strong governance and regulation.
“Leaders from across the industry must present a united front in following the principles of good governance to build a future for European football that can excite fans, players and partners across all leagues.”
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