17th July 2017

Football Profitability Index®

The Football Profitability Index (FPI) enables comparison between football clubs on a like-for-like basis in terms of their efficiency in achieving Economic Profit (EP). We express the relationship between revenue and the EP number by calculating an EP/R value® which, very simply, is the Economic Profit or Loss number divided by annual revenue.

In a footballing context, the EP/R value number is also referred to as the FPI number/value. We then take all of the FPI values for the individual football clubs and recalibrate the numbers to create the index.

We use an index value of 100 to reflect a breakeven position ie FPI values of 100+ will reflect an economically profitable performance whilst FPI values under 100 will reflect an economically negative (and thus loss-making) performance.

We can also tabulate the FPI values to reflect Economic Profit or Loss performance per £100 of revenue which is the economic efficiency level of the organisation in question.

Table taken from ‘We’re So Rich It’s Unbelievable! – 3rd Edition’.


The above table highlights the 2016-17 Premier League division ranked in order of economic efficiency by FPI value. Leicester City, Premier League champions in 2015-16, achieved significant economic profits of £86.47m in the following season as indicated and also managed to attain the position of being the most economically efficient club whilst doing so.

Thus, Leicester City’s FPI value of 137.11 can interpreted as follows; for every £100 of revenue, the club achieved an economic profit of £37.11 ie 137.11 – 100.

Contrast this with Manchester City at the bottom of the table. The club’s FPI value is 86.36. As it is below the breakeven mark of 100, the club therefore achieved economic losses during the season in question ie £64.55m as indicated in the table.

Manchester City’s economic efficiency per £100 of revenue can be calculated in a similar manner to that of Leicester City ie FPI value – 100. Therefore, in Manchester City’s case, the calculation can be expressed as 86.36 – 100 = -£13.64.

A direct comparison between the two clubs shows that there is a £50.75 per £100 of revenue differential in economic performance, partly reflecting the success of the East Midlands club in European competition versus the continuing capital investment in Manchester City by its owners.

Furthermore, Chelsea won the Premier league title whilst achieving economic losses of £11.76 per £100 of revenue and ended up in 18th place in the economic efficiency rankings. Indeed, only Manchester United and Leicester City have won a Premier League title and achieved an economic profit in the same season since 2009; 7 out of the 10 most recent titles have been achieved by a club making economic losses in doing so.


Table taken from ‘We’re So Rich It’s Unbelievable! – 3rd Edition’.


The second table highlights the influence of the 2016-19 domestic TV deal on the economic fortunes of clubs that played in the Premier League in both the 2015-16 and 2016-17 seasons. Barring four of the ‘top 6’ clubs plus Sunderland which had been dogged by financial issues in recent seasons, the remaining clubs achieved economic profits in the first year of the new TV deal in 2016-17 with some experiencing significant change due to this and other influencing factors including the participation in European competition, profits from player sales and a ground sale (West Ham United).

So, what does the FPI actually tell us?

  • The most economically inefficient Premier League clubs generally reside in the ‘top 6’ grouping by revenue and league position.
  • The club with the lowest FPI value outside of the ‘top 6’ group is usually relegated.
  • A declining FPI value over time (3yrs+) usually results in relegation for clubs outside of the ‘top 6’ group.

The point about the FPI is that it has uncovered certain previously hidden relationships between financial and on-pitch performance that measures such as pre-tax profit or EBIT/EBITDA are incapable of revealing. The transparency delivered by the economic profit metric and amplified by the FPI highlights some of the serious deficiencies in key financial dynamics within the world of football. Both clubs and regulators fail to see this. Therefore, schemes such as Financial Fair Play and other similar schemes at a local level do not go deep enough into the performance of the individual businesses. Thus there will always be a ‘Sunderland’ or a ‘Birmingham City’ scenario until such time as the correct measures are used.

You can read more about the FPI in our annual review of the Premier League clubs in ‘We’re So Rich It’s Unbelievable! – 3rd Edition’.