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A recent report published by financial analyst ‘Vysyble’ have circled out the flaws and what implications such overspending by the Premier League could lead up in the coming days. The staggering amount of sum these clubs are offering for in the present transfer market is overwhelming and is result of the product of TV viewership deal the Premier League generates but it’s not here to stay forever and hence there may be a situation where funds generated from TV viewership may reduce and the clubs will not be able to alleviate the dent to their financial structure courtesy large wages and transfer sum and may crumble to bankruptcy. Clubs have lost £2billion in eight years since 2008-9 based on the difference between revenue and costs.
Co-author Roger Bell said: “Clubs are losing a record £876,700 every day. TV cash does not meet the millions spent on wages. The league should be very worried.”
Titled ‘We’re so Rich its Unbelievable’, the document is based on the accounts of all Premier League clubs between 2008/09 and 2015/16. It states that Clubs have lost £2billion in eight years since 2008-9 based on the difference between revenue and costs. This may well force the bigger clubs to form a European Super League or come with an alternative mini league to sustain the pressure and more live games to be telecasted as the TV rights constitute to more than 70% of the funds.
“Most of them are spending a lot more than they’re taking in,” said Purcell. “Across the league, clubs are losing £8.80 for every £100 they bring in, and that’s based on 2015-16. I suspect it will be more like £12-13 now. The game is facing massive financial and structural risk.”
“I don’t think there is any way BT or Sky can commit to that kind of money. OK, you can put on more live games, and we’ve seen that trend already, but ultimately dilutes the product.
“I suspect we are heading towards a European Super League where the new breed of owners, many of them from North America, can organise the type of league they know and understand: fixed squads, salary caps, big TV events.
Purcell said only five clubs made an economic profit in 2015/16, the worst performance since 2012/13, with Chelsea and Manchester City accounting for more than half of the league’s total losses over the report’s eight-year period.
The fact that Norwich City were ranked ahead of Leicester City in year when they won the league and Blackpool have been gaining profit in past 5 seasons as they continue to slide down the league pyramid is an alarming sign.