A number of Premier League clubs have recently published their annual accounts.
Aston Villa announced they had made an £85.4m loss, Everton published a £53.2m loss, Tottenham a £26.2m loss, and Chelsea a rare £128.4m profit. But what do those figures mean regarding the Premier League's Profit and Sustainability rules (PSR), and which clubs are in the healthiest financial position to spend big in this summer's transfer window?
Sky Sports News senior reporter Rob Dorsett has been crunching the numbers.
Which clubs are at risk of breaching the PSR rules, and facing a points deduction?
The truth is, we don't know, but it looks unlikely that any clubs will face punishment this season. Each club is permitted to lose £105m over a rolling three-year period, and all those clubs who were at greatest risk of breaching that mark were obliged under league rules to submit their PSR accounts early, by the end of December. The identities of those clubs is kept secret. That rule was introduced in 2023 to try to ensure that there is enough time for any club which breaks the rules to be given a points deduction that same season.
The Premier League announced in January that all of the clubs that had submitted their PSR accounts in December were compliant. However, the remaining clubs had to make their PSR submissions by March 31, and so their figures are all being scrutinised by the Premier League auditors right now. It may seem unlikely that any club deemed "not at risk" of breaching at Christmas has now over-stepped the spending mark, but it is possible.
What's the difference between the club accounts we see and the PSR accounts the PL is sent?
This is the key question. It is totally understandable that fans will see their club publish their annual accounts and be confused about why - despite some huge losses - they are not in breach of the PSR rules. Look at Aston Villa, for example. They have lost £204.7m over the last three years, and yet - as we have already established - they are only allowed to lose a maximum of £105m to avoid breaching the PSR rules. Crucially, there are a lot of expenses included in company accounts which are exempt from PSR spending. Any money a club spends on facilities or infrastructure, their women's team, the community, the academy and depreciation is not included in the PSR calculation. There is no suggestion Villa have breached the financial rules, and so we can assume they must have spent at least £99.7m over the last three years on those "add-backs". As an example, Villa's public accounts stipulate they have spent £29.7m on stadium refurbishment and a new retail store in the last two years - all of that money is PSR-exempt because it is deemed to be in the wider interest of the club and football generally. The financial accounts that the club makes public via Companies House each year are very different from the confidential PSR accounts, which are seen only by Premier League officials.
Manchester United have recorded bigger losses than any other PL club, according to their accounts. How can they afford the massive new stadium they are planning to build?
This is where we have to draw a distinction once again between the club (company) accounts that are made public, and the PSR accounts that are lodged in secret. United's latest accounts, released in September, show they have lost over a quarter of a billion pounds in the last three years. A £257.4m deficit since 2021. Sir Jim Ratcliffe has acknowledged that is a big problem and is unsustainable, and he is embarking on a thorough, club-wide cost review, which is expected to save up to £35m over the next two years. That has included hundreds of job losses, and has controversially included a hike in ticket prices to boost revenue, which has been condemned by supporter groups. Repeated under-performance on the pitch has starved the club of funding, in what has become a vicious circle. Nevertheless, if the owners are content to stomach the huge costs of the £2bn "New Trafford", that won't have any impact on their PSR situation, because - again - infrastructure spending is exempt from those rules. If United do go ahead with their stadium plans, the public accounts are expected to show a big deficit for many years to come, with the hope that the improved capacity, facilities and commercial opportunities will pay dividends in the long run.
Mikel Arteta has said it will be a "big summer" for Arsenal in the transfer market. Does their financial situation make that possible?
In short, yes it does. Arsenal have been prudent in their spending, and shrewd in their commerciality, showing only a modest £17.7m loss in their latest public accounts which were published in February. That, combined with a record revenue of £616.6m at the Emirates up to the summer of 2024, means there is a significant war chest at Arteta's disposal to strengthen his squad - and he is promising to do exactly that. "We are very excited about it," he says, with good reason. New sporting director Andrea Berta has been brought in specifically to make the high-profile deals happen, with a centre forward, winger and midfielder all on the wanted list. It is now realistic for Arsenal to consider the elite talent of Alexander Isak at Newcastle, Benjamin Sesko at RB Leipzig and Sporting's Viktor Gyokeres up top, with Athletic Bilbao's Nico Williams an achievable target, and a £50m+ deal for Spain midfielder Martin Zubimendi from Real Sociedad supposedly already close. The comfort blanket in terms of their PSR account gives Arsenal the clout to spend big in the next window, and mount a renewed push for the Premier League title.
Liverpool have been the dominant PL team this season - how are their finances looking?
The Premier League champions-elect are in good shape both on and off the pitch - with more than £150m due to come their way if they manage to lift the trophy. Their public accounts show they are comfortably within the PSR limits (with relatively tiny losses of less than £2m across the first two years of the three-year cycle). This would suggest that Arne Slot could be given a healthy budget to strengthen his squad in the summer if he and the club decide that is necessary.
Chelsea recorded a big profit up to the end of the financial year 2024. How so?
The biggest single factor was the sale of the Chelsea women's team to the club's parent company, Blueco, which netted just short of £200m. Such one-off deals are permitted under Premier League rules, so long as they are conducted at "fair market value". That turned what would have been a £71.6m deficit into a rare £128.4m profit for the last financial year, and means their balance sheet is now looking much more healthy. Potentially, that could mean Chelsea have the flexibility to invest in the squad this summer, if the club's bosses feel that is the way they want to go.
Man City stand alone in recording three consecutive years of club profit. How have they managed that?
In fact, Manchester City have now recorded a profit every season since 2014-15, with the exception of the Covid-impacted 2019-20 campaign. That is extraordinary, compared with their competitors. They have, of course, enjoyed unprecedented success on the pitch under Pep Guardiola, with huge rewards as a result - they recorded a Premier League-record revenue of £715m to 2024. In theory, that gives them the option to spend big on players in the summer, without fear of breaching the PSR rules. However, City are, of course, awaiting the result of the outstanding 100+ charges that the PL has levied against them for historical breaches of the financial rules - allegations that City vehemently deny.
Tottenham have had to stomach some big losses in recent years - should they be worried?
It is true that Tottenham's club accounts show they have lost over £160m over the past three years, but again - there is no suggestion they are close to breaching PSR. They have a huge asset in the state-of-the-art Tottenham Hotspur Stadium, which cost them a staggering £1.2bn in 2019. Their revenue was more than £50m down this year through missing out on European football, and there will be concern that their prize money will take a further hit going forward, with the team 14th in the Premier League. They are of course still in the Europa League hunt, and can still qualify for next season's Champions League by winning that tournament.
What about Everton? They have faced a points deduction in the past for breaching PSR rules. What's their situation?
Again, it is important to point out that there is no suggestion Everton are at risk of a breach. Their public accounts, released on Monday, show a very sizeable £180.4m loss over the three years to May 2024, but we know a great deal of that expenditure has been in relation to the building of their impressive new stadium at Bramley-Moor Dock, which has an estimated cost of £750m. Again, under the rules, this spending is exempt from PSR because it is for the betterment of the club and the game and is not designed to give Everton an unfair advantage on the pitch.
