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Premier League success adds £7.6bn into UK economy

We are all aware of the unimaginable sums that some Premier League footballers are paid. But have you ever considered the organisation to be a national financial asset? The accountancy firm Ernst and Young report that, in total, the Premier League added £7.6bn to the UK’s Gross Domestic Product (GDP) in the 2016-17 tax year.

Not only is this an enormous figure, it is a massive increase from the £3.4bn it made in the 2013-14 tax year.

How are they bringing in so much money?

There are 20 football clubs in the Premier League, with 1,500 registered professional players. They alone made the Treasury £1.1bn in income tax, in 2016-17. Together, the clubs and the League made £3.3bn in tax. Yes, that’s 3.3 billion pounds.

As reported in The Times, the breakdown of this £3.3bn looks like this:

Cumulatively, the clubs employ around 100,000 people, an increase of 30% since 2013-14.

Mark Gregory, Ernst and Young’s chief economist, said: “The Premier League is a globally recognised brand, built upon high-quality football. The league’s global success feeds into its capacity to generate economic and social returns within the UK. The strength of the Premier League broadcast offering, which is based on a committed global fanbase, is key to its success. The Premier League has also become an active member of the global community, presenting many commercial opportunities for the UK. Our latest report clearly shows that a successful Premier League is good not just for football but for the country as a whole.”

Rather unsurprisingly, the government have a positive outlook on this substantial tax haul.

The international trade secretary, Dr Liam Fox MP, said: “As the most-watched football league in the world, the Premier League is the definition of a great British export. These latest figures show just how much it positively impacts our economy, generating jobs and putting money in the bank. I’m delighted to see the Premier League continually go from strength-to-strength, with it fundamentally changing how people across the world watch and even play football. My international economic department and the whole of the UK government stands ready to support in any way possible.”

Will Brexit have an impact on the financial success of the Premier League?

As with everything Brexit, there are those who think it will have a positive impact and those that predict a negative impact on our Premier League.

There are currently players with 63 different nationalities playing in Premier League clubs and they host 686,000 visitors from abroad every year.

Possible positive impact of Brexit

The Football Association feels that Brexit could have the positive consequence of encouraging the development of British talent, instead of buying it in from abroad. The Premier League wants to have unrestricted powers to buy from all countries. The Football Association has already said it will agree to this, if the quota of British players per squad goes up to 12 (currently set at eight).

Possible negative impact of Brexit

The executive director of the Premier League, Bill Bush, said: “The broad position before the referendum was that on balance the clubs were cautious Remainers. There are Brexit outcomes which could be quite positive for the Premier League and Brexit outcomes which could be harmful. We are concerned because of the uncertainty.”

There are some very real worries around the restrictive nature of possible post-Brexit work permits for EU players.

Mr Bush also told The Independent: “It is a simple model: many of the best players in the world, playing for some of football’s finest clubs, in a compelling competition, in front of passionate fans, broadcast here and around the world. Great football gives us the economic success to invest in our own competition and provide unparalleled support to the English Football League, youth development, the non-league system and community football. The national economy benefits from over £1bn in overseas earnings and over £3bn in tax because our clubs strive so hard to get the football right.”

Looking at the figures further demonstrates the Premier Leagues strength. These are values of the annual overseas TV rights:

  • £900 million: Ligue 1, Serie A, La Liga, and Bundesliga all added together
  • £1.1billion: Premier League

Not only a beautiful game, but one that provides huge financial income to our country. Hopefully this will continue to grow after the Brexit question is resolved.

 

January 27th, 2019|Tax News|

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