As a result of the £5.5bn Premier League broadcasting deal this season’s Premier League champions will receive £93m from TV money while the bottom club will earn around £63m. Therefore, even the team who finishes bottom will exceed the income of last season’s (2012/13) champions Manchester United who received £60.8m in broadcasting fees. In total, the Premier League clubs will be paid the sum of £5.5bn for the period of 2013 until 2016. Let’s have a closer look on how that money is distributed among the 20 Premier League teams.
1. Domestic deals
50% of the domestic broadcasting fees are split equally among all 20 Premier League clubs and 25% are distributed as merit money based on the team’s position in the final league table. Per place a club finishes up the table it will earn around £1.2m, up to £24m for finishing top of the Premier League. The remaining 25% are so-called ‘facility fees’ and paid for each time a club’s matches are shown as live matches on TV in the United Kingdom. As a result of the new TV deal, each team will receive around £750,000 per match when appearing on your TV screen at home or in your local bar.
2. Overseas broadcasting
100% of all overseas Premier League broadcasting rights are split equally between the member clubs of the league. Since the overseas TV money increased by 70% compared to the preceding Premier League broadcasting deal, each club will earn around £32m per year from this agreement alone.
Thanks to this massive growth in broadcasting money, Premier League clubs who have been struggling in the past with a steady surge in players’ wages are now enabled to turn their financial fortunes around. However, Premier Leagues chief executive Richard Scudamore hopes that the clubs will not simply use the new broadcasting deal to rack-up losses and even accelerate players’ wage inflation. Besides spending some of the money on the attraction of new stars, teams should also think ahead and invest in infrastructure and youth development:
“We are entering a new era with financial fair play, I’m hoping it will get invested in things other than playing talent. It should also be able to achieve sustainability”.
Even though the deal has many good sides to it for the clubs (financial security over the next 4 years, able to compete with other European leagues) and football fans (new stars, potentially reduced ticket prices) it is also likely to lead to another sharp rise in transfer fees and TV package fees for consumers as BT and Sky may have to charge more to cover their huge investment.
Did you know? In 1995, the first TV deal of the Premier League era was worth £304m over five years – only 4.42% of today’s broadcasting deal.
References: Telegraph, ESPN, The Guardian