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How Much Do Clubs Make in Broadcasting Income?

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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 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 GylfiSigurdsson). 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 LiveTV broadcasts, and is also known as, ‘facility fees’.

Each team receives 1 million pounds per TV appearance and is guaranteed a minimum of 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 £150.8millionfor 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 finishing the table in last 3 years.25% According to the 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 Expressestimated Bournemouth, Watford, Swansea, as the three clubs most reliant on TV money, with Manchester United the least reliant

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