17th July 2017

Football Profitability Index®

The Football Profitability Index (FPI) enables investors, analysts and fans to compare each English Premier League club on a like-for-like basis in terms of the efficiency in achieving economic profit (EP). We calculate the relationship between revenue and the EP number to arrive at an EP/R value. For commercial reasons this value is also known as the FPI value. The FPI values can then be tabulated into an index and the ranking of the resulting index values will indicate the relative performance of EP efficiency on a club-by-club basis. Not only can we see the absolute financial performance of each club, we can also measure just how good (or bad) they are financially at managing their revenue and achieving EP.

It works like this:

The top 3 English Premier League clubs by revenue and their most recent 3-year revenue performance is illustrated below:

 Revenue £m 2013-14 2014-15 2015-16
Manchester United £433.16 £395.18 £515.35
Manchester City £346.51 £351.77 £391.77
Arsenal £301.87 £344.52 £353.54

Graphically, it looks like this:

All the clubs have increased their revenue over the last three years albeit at different rates.

The EP performance for each club over the same period is as follows:

 £m 2013-14 2014-15 2015-16
Manchester United -£0.73 -£39.77 -£17.39
Manchester City -£60.04 -£40.50 -£43.00
Arsenal -£34.29 -£17.38 -£40.40

Graphically, it looks like this:

Despite, or possibly because of, the increase in revenue, the EP performance reveals that the clubs are struggling to produce a return higher than the cost of all their capital (in other words to be EP positive – see our football report for more details).

When we apply the FPI value calculation to individual club performance, the results reveal some interesting underlying trends and shifts.

FPI value 2013/14 2014/15 2015/16
Manchester United 99.83 89.94 96.63
Manchester City 82.67 88.49 89.02
Arsenal 88.64 94.96 88.57

The FPI values can be converted to illustrate a monetary value in terms of EP efficiency. For instance, in Manchester United’s 2014/15 accounting period, the club achieved an FPI value of 89.94 – thus for every £100 of revenue, the club generated a negative EP of £10.06 (ie 89.94 – £100).

Arsenal’s FPI value (94.96 – for every £100 of revenue, the club generated a negative EP of £5.04 ie 94.96 – £100) for the same accounting period is the highest of the three clubs and ahead of Manchester United, a feat previously achieved in 2009-10 and 2011-12. Arsenal’s overall FPI performance during the three-year period is near-neutral whilst Manchester City’s has steadily improved. This in itself is a continuation of a longer-term trend from 2010-11 when the club returned a negative FPI value.

However, the FPI value chart also shows that Manchester City has overtaken Arsenal in terms of economic profit efficiency.


The longer-term trend in FPI values highlights a shallow decline for Arsenal whilst Manchester United have flitted between periods of achieving economic profit and losses following its title-winning and very economically profitable season of 2008-9. The stand-out performer of the three clubs is Manchester City which has vastly improved its EP efficiency since 2010-11 despite the lack of a positive EP return.

It is, however, clear from the above chart that the top English football clubs are generally inefficient in generating economic profits with the three clubs only achieving economic profits on 5 occasions out of a possible 24 between 2008-9 and 2015-16.

Furthermore, the collective performance of the three clubs can be indexed using the FPI calculation to highlight and benchmark the cohort’s overall performance.

The three clubs’ collective EP efficiency has only marginally improved to a loss of £8.00 per £100 of revenue in 2015-16 from a loss of £8.79 per £100 of revenue in 2013-14 despite a near-17% increase in revenue from a total of £1.08bn in 2013-14 to £1.26bn in 2015-16. The overall trend within the Premier League division is one of declining EP efficiency during the same period, from a FPI value of 99.64 in 2013-14 down to 91.13 in 2015-16. Therefore, in some respects the cohort of three has bucked a couple of EP trends but has also landed very close to the Premier League FPI value in 2015-16 of 91.13.

The intriguing aspect of the cohort’s FPI performance is the failure to capitalise on the 70% increase in domestic TV revenues in 2013-14 whilst the Premier League as a whole did just that and missed achieving positive EP efficiency by a whisker with a value of 99.64 ie an EP loss of £0.36 per £100 of revenue. Indeed, the Premier League has not collectively achieved a positive EP between 2009-2015. Whilst the cohort was achieving economic losses of £8.00 per £100, the divisional EP results illustrate a temporary economic improvement with 10 clubs achieving economic profits in 2013-14 (up from 4 the previous year) although this had dropped back to 5 by 2015-16.

Thus, the use of the FPI value metric and its expression of EP efficiency provides additional insight into the relative performance of the individual clubs and the division in its entirety. It also reveals trend profiles which would have otherwise remained hidden eg Manchester City’s improving EP efficiency performance relative to Arsenal.