How Much Do Clubs Make in Broadcasting Income?

Summary

This summer, the Premier League's financial prowess was highlighted by record-breaking transfer fees. The TV rights deal, which began in the 2016/17 season, saw a 71% increase in revenue to £5.14 billion, with SKY paying 83% more. Revenue is distributed equally, based on merit, and through 'facility fees' for TV appearances. Overseas rights add £780 million, shared equally among clubs. Chelsea earned £150.8 million for winning last season, while even relegated Sunderland received £93.471 million. The Premier League's revenue sharing is more equal compared to other European leagues, with the ratio between the highest and lowest earners being 1.61 to 1.

Takeaways

• 🏆 The Premier League's financial power was highlighted during the summer transfer window with clubs breaking transfer records.
• 📺 The 2016/17 season saw a new TV rights deal that brought in a 71% increase in revenue for broadcasters, totaling £5.14 billion.
• 💷 Domestic TV money is worth around £1.7 billion per season, with 50% divided equally among clubs, 25% based on league position, and 25% on TV appearances.
• 🔄 The merit-based distribution means the bottom club receives £1.9 million, increasing by the same amount for each higher position.
• 🏅 Champions earn roughly £38 million from merit-based TV money, while 10th place earns £21 million.
• 📹 'Facility fees' ensure each club gets £1 million per TV appearance, with a minimum guarantee of £10 million per season.
• 🌐 Overseas rights add £780 million per season, equally distributed to each club, amounting to about £39 million per club.
• 🏦 Last season, Chelsea, as champions, earned £150.8 million, while relegated Sunderland earned £93.471 million.
• 💲 The Premier League has a 1.61 to 1 ratio between the highest and lowest earning clubs, indicating a more equal revenue sharing compared to other European leagues.
• 🇪🇸 In contrast, La Liga's previous structure heavily favored Barcelona and Real Madrid, but a renegotiation in 2016 introduced a more equal distribution model.
• 💰 Bournemouth, Watford, and Swansea are the clubs most reliant on TV money, while Manchester United is the least reliant according to the Daily Express.

Q & A

What is the significance of the Premier League's financial power in the summer transfer market?

The Premier League's financial power allows clubs to break their previous transfer records, as seen in the summer months of June, July, and August, by spending large sums on player transfers.

How did the latest Premier League TV rights deal impact the clubs financially?

The latest TV rights deal, starting from the 2016/17 season, resulted in a 71% increase in revenue for broadcasters, with clubs earning a record windfall of 5.14 billion pounds.

Which broadcaster paid 83% more for the latest Premier League TV rights deal compared to the previous deal?

SKY paid 83% more for the latest Premier League TV rights deal compared to the previous one.

How is the domestic TV money distributed among Premier League clubs?

50% of domestic TV money is divided equally among clubs, 25% is merit-based on final league position, and the remaining 25% is based on the number of TV appearances (facility fees).

What is the minimum amount a club can earn from domestic TV money per season?

A club can earn a minimum of £10 million per season from domestic TV money, even if they appear in less than 10 games.

How much does each Premier League club earn from overseas rights per season?

Each Premier League club earns roughly 39 million pounds per season from overseas rights, which adds up to 780 million pounds to the pot.

What was the earning ratio between the highest and lowest earning clubs in the Premier League last season?

The ratio between the highest and lowest earning clubs in the Premier League last season was 1.61 to 1.

How does the Premier League's revenue sharing compare to other European leagues?

The Premier League is more equal in sharing revenue compared to its European rivals, with a lower earning ratio between the highest and lowest earning clubs.

What changes were made to the revenue sharing structure in La Liga after 2016?

In 2016, La Liga renegotiated its structure to 50% equal share for all clubs, 25% merit money based on the clubs' performance in the last three years, and 25% based on the clubs' resource generation ability.

Which clubs are most reliant on TV money according to the Daily Express?

Bournemouth, Watford, and Swansea were estimated to be the three clubs most reliant on TV money, with Manchester United being the least reliant.

Outlines

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💷 Financial Dominance of Premier League Clubs

The Premier League's financial strength is highlighted by record-breaking transfer activities during the summer months. The TV rights deal, which began in the 2016/17 season, has been a significant factor, with a 71% increase in broadcaster payments compared to the previous deal. The revenue is distributed among clubs in three ways: 50% is shared equally, 25% is merit-based on league position, and the remaining 25% is based on TV appearances. Overseas rights add an additional £780 million to the pot. Last season, Chelsea earned £150.8 million for winning the title, while even relegated Sunderland earned £93.471 million. The Premier League has a lower earning ratio between top and bottom clubs compared to other European leagues, indicating a more equal revenue distribution.

Keywords

💡Premier League

The Premier League is the top level of the English football league system. It is one of the most popular and financially lucrative football leagues globally. In the context of the video, the financial power of the Premier League is highlighted by the significant transfer fees clubs are able to pay, largely due to the lucrative TV rights deals. The video mentions how clubs have broken their previous transfer records, showcasing the financial dominance of the league.

💡Transfer records

Transfer records refer to the highest fees paid by football clubs for signing new players. The video script discusses how several Premier League clubs have broken their previous transfer records during the summer transfer window, indicating the financial strength of these clubs and the high stakes involved in player acquisitions.

💡TV rights deal

A TV rights deal is an agreement between a sports league and broadcasters for the rights to broadcast the league's games. The video emphasizes the importance of the Premier League's TV rights deal, which began in the 2016/17 season, as a key factor in the financial dominance of the league. The deal's value increased by 71%, providing clubs with a substantial windfall.

💡Broadcasters

Broadcasters are entities that transmit television or radio programs to the public. In the video, the term is used to describe the companies that pay for the rights to broadcast Premier League matches, such as SKY, which is mentioned to have paid 83% more in the latest TV rights deal compared to the previous one.

💡Domestic TV money

Domestic TV money refers to the revenue generated from broadcasting rights within the country where the league is based. The video explains that this is estimated to be worth around £1.7 billion per season in the Premier League, with 50% of this sum divided equally among clubs, illustrating the significant financial support each club receives.

💡Merit-based earnings

Merit-based earnings are funds allocated to clubs based on their performance in the league. The video details that 25% of domestic TV money is merit-based, with the team finishing at the bottom receiving £1.9 million and the amount increasing for each position higher, culminating in the champions earning around £38 million.

💡Facility fees

Facility fees are payments made to clubs for each time they appear on live TV broadcasts. The video mentions that each team receives £1 million per TV appearance and is guaranteed a minimum of £10 million per season, even if they appear in fewer than 10 games, highlighting the substantial financial incentives for TV exposure.

💡Overseas rights

Overseas rights are the broadcasting rights for matches outside the league's home country. The video states that overseas rights add a further £780 million to the pot per season, with each Premier League club receiving roughly £39 million per season, showcasing the global appeal and financial rewards of the league.

💡Revenue sharing

Revenue sharing is the distribution of income among clubs in a league. The video discusses how the Premier League has a more equal revenue sharing model compared to other European leagues, with the ratio between the highest and lowest earning clubs being 1.61 to 1, indicating a more balanced financial distribution.

💡Financial reliance on TV money

Financial reliance on TV money refers to the degree to which clubs depend on television broadcast revenues. The video cites an example from the Daily Express, estimating that Bournemouth, Watford, and Swansea are the clubs most reliant on TV money, while Manchester United is the least reliant, highlighting the varying financial strategies and dependencies among clubs.

Highlights

This summer has seen the financial power of the Premier League come into focus once again.

A number of clubs breaking their previous transfer records during June, July, and August.

The latest Premier League TV rights deal kicked in during the 2016/17 season.

Clubs earned a record windfall of 5.14 billion pounds.

There was a 71% increase for broadcasters compared to the previous deal.

SKY paid 83% more than it did in the last round three years ago.

The money is split up in three key ways: Domestic TV money, merit-based earnings, and facility fees.

Domestic TV money is estimated to be worth around £1.7 billion pounds per season.

50% of domestic TV money is divided equally among clubs, worth roughly £35 million per club.

25% of domestic TV money is merit-based, earned depending on a club’s final league position.

The team finishing bottom receives roughly 1.9 million pounds, with 1.9 million pounds for each place above that.

The Champions earn roughly 38 million pounds, and 10th place earns 21 million pounds.

The remaining 25% is divided up among clubs depending on how often they appear on live TV broadcasts.

Each team receives 1 million pounds per TV appearance, with a minimum guarantee of £10 million per season.

Overseas rights add a further 780 million pounds to the pot per season.

Overseas rights are dished out equally to each Premier League club, earning them roughly 39 million pounds per season.

Last season, Champions Chelsea earned a staggering £150.8 million, while relegated Sunderland earned £93.471 million.

The ratio between highest and lowest earning clubs last season was 1.61 to 1, the lowest among Europe's top leagues.

Spain's La Liga had a renegotiation in 2016, changing the structure of revenue distribution.

Bournemouth, Watford, Swansea are the three clubs most reliant on TV money, with Manchester United the least reliant.

Transcripts

This summer has seen the financial power of the Premier League come into focus once again,

with a number of clubs breaking their previous transfer records during the months of June,

July, and August.

In attempting to understand the reasons behind the England’s financial dominance one must

look at the benefit of the TV rights deal.

The latest Premier League TV rights deal kicked in during the 2016/17 season, and saw clubs

earn a record windfall of 5.14 billion pounds.

Compared to the deal from 2013 until 2016 it represented a 71% increase for broadcasters

according to the BBC, with SKY paying 83% more than it did in the last round three years

ago.

This money is split up in three key ways.

Domestic TV money is estimated to be worth around £1.7billion pounds per season.

50% of this is divided equally and is worth roughly £35 million per club, (or one Gylfi

Sigurdsson).

A further 25% is merit based and earned dependant on a club’s final league position.

The team that finishes bottom of the Premier League will receive roughly 1.9 million pounds,

with a further 1.9 million pounds for each place above that -- e.g. the Champions earn

roughly 38 million pounds and 10th place earns 21 million pounds.

The remaining 25% is divided up among clubs depending on how often they appear on live

TV broadcasts, and is also known as, ‘facility fees’.

Each team receives 1 million pounds per TV appearance, and is guaranteed a minimum of

£10 million per season, even if they appear in less than 10 games.

Let us also not forget the overseas rights, which add a further 780 million pounds to

the pot per season.

This is dished out equally to each Premier League club and earns them roughly 39 million

pounds per season.

All in all this helps produce some staggering incomes for the Premier League clubs.

Taking last season as an example, Champions Chelsea earned a staggering £150.8million

for winning the title.

Relegated Sunderland earned an equally impressive £93.471million.

The ratio between highest and lowest earning clubs last season was 1.61 to 1, the lowest

among Europe's top leagues, which means the Premier League is more equal when it comes

to sharing revenue than its rivals.

For example, Spain had at one time seen Barcelona and Real Madrid enjoy a lion’s share of

the funds.

The season Atletico Madrid won the league they collected 42 million euros, compared

to 140million euros for Real Madrid and Barcelona, and 18m for Almeria.

In 2016 however a renegotiation saw the structure change to the following parameters.

50% Equal share for all 20 clubs in La Liga 25% Merit money based on how the clubs finish

in the table in last 3 years.

25% According to resource generation ability of clubs

However, don’t expect a glut of spending in Spain.

Their 3 year deal still represented half of what the Premier League collects during the

same period for domestic rights.

While reliance on the money fluctuates from club to club, a piece in the Daily Express

estimated Bournemouth, Watford, Swansea, as the three clubs most reliant on TV money,

with Manchester United the least reliant