Premier league clubs suffered combined losses of £110 million in the 2015-16 season, despite soaring revenues of £3.6 billion, report agencies.
The 20 top-flight English teams shelled out more on players as wages rose 12 per cent to £2.3 billion last year, while a host of one-off charges also hit the bottom line, according to Deloitte.
The two Manchester clubs were responsible for more than half of the revenue growth, with a combined boost of more than £160 million on the previous year.
Dan Jones, head of Deloitte’s Sport Business Group said, "Manchester United’s participation in the 2015-16 UEFA Champions League, coupled with continued strong commercial revenue growth, resulted in a 30 per cent increase in revenue to 515 million pounds.”
"This saw them top the Deloitte Football Money League for the first time since 2003-04, as the world’s highest revenue-generating club," he said.
Meanwhile, a new broadcast deal with Europe’s governing body, UEFA, had helped United rivals, Manchester City, who reached the semi-finals of the Champions League.
“Increased distributions to clubs competing in Europe, under the new UEFA broadcast rights cycle – notably Manchester City, who reached the semi-finals of the UEFA Champions League – also contributed to Premier League clubs’ revenue growth,” he added. The combined loss for all clubs is the first since 2012-13.
Jones said the losses were likely just a blip due to a number of "exceptional" costs such as Chelsea paying out to Adidas for terminating a kit supply deal early.
Overall revenues look set to be even higher for the current season after a battle between Sky and BT helped deliver a £5.1 billion package for 2016-19, lifting overall TV rights to a record £8 billion.
The extra money has already seen clubs boost spending on new players further to £1.4 billion for the season but is also expected to return teams to profitability.
Several clubs, including West Ham, Chelsea, Tottenham Hotspur, Liverpool, Everton and Manchester City are also in the process of expanding their grounds or moving to new stadiums, meaning increased ticket revenues, Deloitte noted.