New TV rights spell financial windfall for Premier League
The Premier League announced last month they have secured a new broadcasting deal with BSkyB and BT, worth £3bn.
Whilst BT will broadcast 38 matches for three seasons from 2013 onwards, BSkyB remain in control of proceedings once more, with the rights to air 116 games per season.
So what does this mean to the clubs involved?
The new deal sees a rise of £1.25bn, an unprecedented 70% increase for the right to air football across the nation, and all 20 Premier League clubs will receive a handsome sum of money because of this.
Game-by-game, this means the Premier League will receive £6.5m for 90 minutes of play.
BT have secured the package previously ownedby ESPN and will be showing the remnants of matches that BSkyB cannot show, having reached the limit of games allowed to be broadcast by one company.
The value of broadcasted football matches has increased ten-fold since the birth of the Premier League.
The first broadcasting deal to be struck was through 1992-1997, where BSkyB’s deal to show 60 televised matches throughout each season was struck in a deal worth £190m (£633,000 per game).
Since then, the amount of games shown and price per game has gone up dramatically. By 1997, BSkyB were paying £2.79m per match for broadcasting rights.
In 2001, the deal struck by BSkyB and the Premier League to show 110 games eclipsed £1bn for the first time. There is no sign this influx will stop any time soon.
Clubs will reap the financial benefits
Whilst a minimal share of the funds will go towards the league’s running costs, as well as professional bodies including the PFA, LMA and Football League, a hefty chunk of the money will still be shared equally among the 20 clubs.
Last year, a sum of £1.055bn was shared between the teams involved, with £87m of this shared between seven clubs as a parachute payment.
Under the new deal, clubs are set to receive at least £14m more than they already get from the Premier League.
In perspective, Manchester City earned £60.6m for being crowned champions last season. The bottom-placed Premier League club look set to receive this figure from TV rights alone, regardless of how they perform.
Next season’s champions will receive a hike of £29.2m, taking £89.9m for finishing top of the pile.
The team finishing bottom will still earn £53.3m, without taking into account the fact that overseas TV rights may fluctuate. If these rights rise an expected 50%, the bottom club would receive £62.7m, with the champions taking just shy of £100m.
This, alongside the parachute package clubs will receive upon relegation to help cope with the transition between Premier League and Championship demands, means they could be poised to bounce straight back into top-flight football the following season.
Currently, this figure stands at £16m for two seasons and £8m for another two seasons following relegation. It is also set to rise.
Ability to flex financial muscles
It’s almost impossible for a club to fail. That said, huge wage bills and record-breaking transfer fees are still burdening a minority of Premier League clubs. This deal goes a little way to helping lessen the load.
The clubs aiming for European football next season will be less affected, with the new broadcasting deal only showing a slight spike in income, but teams facing the drop would benefit greatly from this rise in broadcasting rights.
The promoted clubs, especially, could even buy a new substitute bench of talent with the new money they are set to receive.
Last year, clubs received an equal sum of £13.8m for TV rights, and another £18.8m for overseas TV rights, with the Premier League striking 81 further deals with broadcasters worldwide.
Including fees for facilities (with teams on TV more often earning more) and merit payments (fees paid depending on final league positions),income handed to Premier League clubs ranged from the chart-topping Manchester City at £60.6m to Wolves, sitting bottom of the pile, still earning £39m for TV rights.
Premier League top the league for equal payments
The Premier League prides itself on its fairly equal payments to clubs, with Manchester City earning £1.55 to every £1 Wolves receive.
To put this in perspective, Spanish monopolies Real Madrid and Barcelona earn 14 times more than most other clubs in La Liga. Italy’s ratio in Serie A is still 10 to 1, France’s Ligue 1 at 3.5 to1 and the German Bundesliga at 2 to 1.
It’s fair to say that many Premier League clubs rely on the league’s earnings to stay competitive the following season, and the new TV deals struck with BSkyB and BT will help this. Of Blackburn’s £57.6m income last year for example, 73% came from Premier League income alone.
There are definitely many ways that clubs benefit from being in top-flight football - Nike give the Premier League £6m a year just to have their footballs on the pitch – but TV rights are where clubs benefit the most.
Whatever way you look at it, these figures are high enough to make your head spin. They fuel the Premier League as the world’s richest, mostcompetitive, and most entertaining league in the world.