Premier League Financial Forecast 2022: Clubs forecast to accumulate losses of £590 million despite all-time high turnover

Despite Premier League clubs finally being relieved of harsh Covid restrictions and projected to bring in a record-high £5.4 billion in turnover, the bottom line did not improve much in 2021/22 at a league level, according to a new report by Off The Pitch. 

Premier League Financial Forecast 2022 reveals that the Premier-League clubs are set for an accumulated loss before taxes of £590 million in 2021/22, which is only an improvement of £60 million on 2020/21 - a year heavily impacted by Covid-19. 

Here is a set of reasons why we project another devastating league-wide loss in the Premier League.

EBITDA down £100 million compared to pre-pandemic levels

Many in the football industry would point the finger directly at spiralling wages to explain the massive accumulated loss. 

However, Off The Pitch forecasts that the wage bill will only increase by £70 million in total, which is rather conservative compared to the previous years – the three years before the pandemic in particular. 

Looking at one of the most central metrics in football finance, wages-to-revenue, it is clear that the surge in turnover helped the league recover to a somewhat more stable position - from an average of 71 per cent in 2020/21 to 65 per cent in 2021/22. However, for one particular club that development was quite the opposite – Leicester City. 

Throughout this summer, the cash register has been shut for the Foxes, following a rather disappointing finish last season. Holding on to key players while not securing European football is estimated to see wages-to-revenue jump from 85 per cent to a staggering 94 per cent, only edged out by Everton’s 96 per cent. 

Operating losses worsened in 2021/22, despite revenue high

Fan attendance back to full capacity around the country is also expected to bring other expenses up to pre-pandemic levels. Unsurprisingly, the largest estimated increase is set to be Tottenham’s, with the club going from £64 million to £111 million, due to their multi-functional stadium coming into proper use.

That is set to leave the EPL clubs with an accumulated EBITDA of slightly below £900 million, around £100-150 million lower than the two latest years before the pandemic.  
What really sets the season in view apart from those before the pandemic, is the massive increase in player amortisations. Since 2017/18, turnover has risen 2.3 per cent per year annually, whilst player spending on wages and amortisations has risen five per cent annually. During Covid the clubs reached a tipping point, essentially spending all proceeds on players. 

That is set to improve in 2021/22 despite player amortisations rising by £110 million to £1.5 billion. However, around 93 per cent of turnover still goes towards wages and amortisations, which is an alarmingly high level when striving to return to profitability.  

After incurring depreciation, other amortisations and exceptional items, we estimate Premier-League clubs will record an operating deficit of £941 million in 2021/22, which, quite astonishingly, is £60 million worse than last year.

Despite profit on player sales rising by £175 million to £530 million, clubs are forecast to post a loss before taxes of a staggering £590 million – the largest deficit recorded in a non-Covid year.

Notably, Leicester City and Manchester United recorded the largest deficits of £122 million and £117 million, respectively. 

On the other hand, just five clubs recorded a profit before taxes. Liverpool are looking to make the highest profit in the league at £77 million. Brentford came second with a very impressive profit of £26.5 million, after their first season in the Premier League.