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Premier League finances. Why the EPL cannot be canceled?

Eduard Bănulescu

Premier League finances are the envy of all other European football leagues. But, with the Football Association seemingly forced to resume the season in spite of health concerns, perhaps, it’s time to take a closer look at the economy yielding English football.

Here are some of the reasons why the Premier League finances are unlikely to allow for a cancelation to the 2019/20 campaign, similar to leagues such as the Dutch Eredivisie.

Premier League finances in 2020. How wealthy are the EPL clubs?

On the surface, the Premier League is living out its golden age. The league is being broadcast across the world. Some of the planet’s biggest stars, players and managers, flock to England. And, sponsorship deals, of all types, arrive in a never-ending flow.

In fact, Premier League finances should be at an all-time high, judging not only by the teams’ revenues, by their profit margins. According to a report by Deloitte, Prem clubs had collectively registered, in 2018, a pre-tax profit of £0.4 billion. Revenues were also up, for the fourth year in a row. And, to the clubs’ delight, wages had decreased by 16%. The trend seems to have continued up until early 2020.

How rich are Premier League owners in 2020?

Premier League owners are very rich and influential people. This goes without saying. Naturally, it is also a matter of controversy for those decrying the loss of football’s identity. But, like it or not, these riches are directly responsible for the grand spectacle put on by the English first tier.

When analyzing Premier League finances, club by club, looking at the wealth of their owners is a good indicator of economic health. Manchester City’s Sheikh Mansour is, technically, the richest man owning an EPL club. Sheikh Mansour’s net worth is $20bn.

Source: https://www.sportbible.com/

All other men and women on the list are tremendously wealthy as well, and so are their clubs. Why then are the owners set on completing the 2019/20 campaign at all costs? The news that the Premier League will likely restart soon is exciting from a fan’s perspective, but also worrying.

Why the Premier League can’t be canceled?

The Dutch Eredivisie has already announced it will scrap the 2020 season altogether. Other leagues are soon to follow suit. However, in a meeting on Friday, Premier League stakeholders have voiced their desire to find a way to complete the season. Even prime minister Boris Johnson is said to have chimed in, suggesting that matches be played behind closed doors.

Why can’t the Premier League be canceled? The most simple reason has to do with the money involved. Yes, English clubs are some of the richest in the world. But, the main cause for their good fortunes has to do with the money hovering around the EPL, Europe’s most profitable sports league. It is estimated that in 2020, the league garnered a profit of $5.3 Billion.

There’s the matter of highly lucrative sponsorship deals. For example in 2019, newly promoted clubs like Aston Villa, Norwich, and Sheffield United, all signed the most profitable sponsorship agreements in the clubs’ history.

Brand recognition and growing expenses

Brand recognition is vital in business. There are few places more visible at the moment, regardless of the industry of a brand than on the shirts or sleeves of clubs playing in the most popular sports league in Europe.

For example, Manchester United commands a £64 million fee per year from Chevrolet. Their Mancunian rivals, City, claim £45 million from Etihad. Liverpool earns £40 million from Standard Chartered.

And, that is only a fraction of what a club stands to receive throughout a season. There are also deals made with large sports gear manufacturers. Liverpool’s victory in the Champions League brought them to the attention of Nike. The world-famous brand will pay them £80m-a-year in exchange for designing their kits.  

And, since the league is growing, it seems only natural that clubs will look to expand during this upward phase. Tottenham Hotspur unveiled its £1 billion stadium investment last summer. Everton is building a new stadium as well. Official plans announce that this will become open to the public in 2023 at a cost of $621 million.

Player endorsements worldwide distribution of EPL football

Naturally, football players, also make for great brand ambassadors. As long as they are playing well and staying in the public eye, important companies are willing to pay them large sums of money in exchange for their public approval.

Mohamed Salah (Liverpool) scores his 50th goal in the Premier League

Mohamed Salah earns $9 million a year from endorsements alone. And, it is not only one company that Salah opts to work with. The Egyptian star is involved with Adidas, Electronic Arts, Uber, DHL, or Pepsi.

Paul Pogba earns $31 million over a ten year period from his exclusive endorsement deal with Adidas. England captain, Harry Kane, is sponsored by sports brand competitors, Nike, and was recently featured in their high-profile Nothing beats a Londoner campaign.

More people are watching football than ever before. Amazon will pay £90 million on a three-year-deal through which they’ll be able to broadcast 20 matches every season.

All of these things add to the individual riches of the players involved, but also, to the overall business scheme of the companies involved. These have clear effects on the way the Premier League is run.

Why the 2019/20 Premier League season is most likely to be completed?

The decision to end a competition prematurely leaves a lot of things unsettled. The Premier League, for example, would have to find a way to decide whether Liverpool are to receive their much-deserved title. Or, whether teams like Norwich are to relegate.

But, beyond that, the cancelation would have immediate and long-term financial effects on the Premier League and its clubs. Simply put, cynical as it risks sounding, there is far too much money at stake for the competition to be quietly put to bed for the remainder of the campaign.

Premier League finances, while they may be great at the moment, are reliant on a large injection of cash flow if they are to stay this way. And, as the actions of some of the clubs’ owners have shown, few get rich by simply choosing to give money away. This is why the Premier League will not be canceled.

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