Premier League Clubs Could Face Reckoning Due To Dependence On TV Rights, Study Finds

The Premier League’s biggest clubs face a reckoning as the "illusion" of wealth created by "steep rises" in TV rights fees meets "economic reality," an analysis of football’s thirst for cash indicated, according to Christopher Williams of the London TELEGRAPH. Seven of England’s biggest clubs have "destroyed" a total of £1.1B ($1.36B) in the last seven years, calculations by the consultancy Vysyble show. The figure is "based on the economic losses calculated from net operating profit after tax, less capital charges." The measure "is preferred by some economists to traditional profit calculations as a way of judging businesses." Man City alone has "racked up" £614M ($758.5M) in economic losses since the '08-09 season, the report said. Yet Premier League clubs have fostered an "illusion of wealth" by focusing on increases in turnover. Clubs would be "financially tested if the steep increases in the value of their live TV rights come to an end" (TELEGRAPH, 11/19).