Interestingly, the Premier League hasn’t just grown gradually over the years either, its economic impact has exploded, expanding roughly fourteen-fold since the late 90s.
However there is only a break of some 12 days after the UEFA Champions League final this weekend before the World Cup commences in the ‘Americas’. The global phenomena that is football produces a lot of economic draw, and in fact there are elements of it that are growing faster than pretty much any other sector. As a break from our usual content, we thought we would throw some colour on the financial impact of the Premier League on the UK economy ahead of the upcoming World Cup – and I think if you are a football fan or not, you might find some of the detail quite fascinating.
As the Premier League season entered its closing weeks, the title race was still alive, and there was a knife-edge relegation battle that flowed through to the final game of the season. Add in a spying scandal and expulsion of a team trying to get into the Premier League, and with crucial results hinging on controversial Video Assistant Referee decisions, love it or loathe it, football is drama at the highest level. As the saying goes, ‘it’s just a game, it’s not life or death’, but actually, for many and for the UK economy in particular, it is so much more than that.
Into the detail… the Premier League generates around £10bn per annum in net revenue to the UK, coming from ticket sales, merchandise and tourism. That represents a fourteen-fold increase since the 1998/99 season, according to Ernst & Young, and is broadly comparable to England’s entire agricultural output! Players earn very high wages (on average a staggering £4m per year), though they contribute £4.4bn in tax revenue, equivalent to the salaries of more than 100,000 NHS nurses. Altogether, the league supports an estimated 104,500 jobs. It really is a driver of gross domestic product.
Interestingly, the Premier League hasn’t just grown gradually over the years either, its economic impact has exploded, expanding roughly fourteen-fold since the late 90s. That’s a rate of growth that would be impressive for a tech start-up, let alone a mature sports league.
How does that compare to other sectors? Well, if we used certain parts of the investment market as a benchmark, the scale becomes even clearer. The Financial Times reported last week that over the same period, the US stock market (S&P 500) has risen by about eight times, delivering roughly 8% annually. In the UK, the FTSE 100 has lagged further behind, with only around three to four-fold growth. The Premier League, therefore, has outgrown both by some margin.
That comparison underlines a bigger story. Stock market growth comes from increases to corporate earnings and the compounding of annual dividends. English football’s top tier has been supercharged by global media, commercialisation and worldwide demand. It is no longer just a sports competition; it is a globalised entertainment industry.
The financial stakes of Premier League membership are now so high that even marginal advantages can tempt extreme behaviour - take the recent spying scandal as an example!
Again, recent data released by Ernst & Young shows that in 2023/24, the league generated £1.7bn in international broadcast revenue alone, nearly equalling the rest of the UK television sector combined. The financial stakes of Premier League membership are now so high that even marginal advantages can tempt extreme behaviour – take the recent spying scandal as an example!
So what is next for the Premier League? Ahead of this season, English clubs spent a record £3.1bn on player transfers — more than the Italian, German, French and Spanish elite leagues combined. The women’s game has experienced a surge in revenue and attendance too.
The Premier League reach is more renowned globally than other iconic British institutions such as Oxbridge, the BBC, and in some parts of the world even maybe the monarchy. Despite this, investing in football clubs worldwide has delivered disappointing outcomes. Increasing wages and spiralling transfer fees make profitability difficult to come by for football clubs. Share prices move on the outcome of a football match… not the sort of investment we would want in our portfolios! Most clubs remain privately owned, some are simply play vehicles for billionaires, whilst others are run as part of a larger corporate structure leveraging on the football clubs brand. In turn, fans complain of rising ticket prices, and concerns about how wealthy investors govern clubs. Fewer than 20% of clubs in the Premier League are owned by British investors. Abu Dhabi-backed Manchester City, a dominant force in the English game, face more than 100 charges of alleged breaches of financial rules. In addition, despite the league’s success, the men’s national team has not won a major international trophy since 1966 and an English manager is yet to manage a team that wins the Premier league title.
Nonetheless, pushing all this to one side, whilst Britain’s political, economic and cultural clout on the global stage weakens, the Premier League is a rare rising asset. Britain is not good at celebrating its successes, but perhaps football is one that it should. At the upcoming World Cup in the US, Canada and Mexico, it may finally end ‘60 years of hurt’… though always remember it’s the hope that kills you.
We will be back in two weeks’ time, with a review of our investment performance in May, which at the time of writing is looking like a very positive month. Enjoy your weekend everyone!
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