How is the Mega Premier League TV money Distributed?
October 03, 2015
By anybody’s standards, £5.136 billion is a huge amount of money. Even when you consider the standards of billionaires such as Chelsea owner Roman Abramovich, this princely sum is large enough to turn heads and warrant careful attention. It must also be spent in a responsible and beneficial manner, especially if it is to add value and achieve its full potential. Incredibly, this was the amount paid by Sky Sports, BT Sport, and the BBC for the right to cover the Premier League, with the deal set to run between 2016 and the end of 2019.
The £5.136 billion sum: How will it be distributed?
In terms of the £5.136 billion sum, Sky Sports was the primary contributor with five packages worth a grand total of £4.2 billion. BT Sports followed up their initial investment with two packages worth a combined £960 million (in addition to securing Champions League coverage). The BBC paid £204 million to screen highlights of the league through its iconic Match of the Day platform, while other media and mobile application rights generated a total of £150 million. This sum does not include overseas broadcasting rights, which are included as part of a separate deal.
So how exactly is this revenue split? In basic terms, 50% of the £5.16 billion is distributed equally among the 20 clubs. A further 25% is distributed on merit, with sums calculated for each league position and awarded to teams depending on their precise finish. There is also a 25% facility fee, which is awarded to clubs according to the live broadcasting schedule. Sides that feature in live matches will be awarded a single game fee in the region of £750,000, so a team that features in 20 real-time broadcasts will be given £15 million over the course of the season.
The Bottom Line and the Bottom Dollar
These huge sums underline the sheer wealth of Premier League clubs, as even teams finishing at the bottom of the table can now earn millions of pounds while benefiting from so-called ‘parachute payments’ after being relegated. This is at least creating some financial stability for top flight clubs and helping newly promoted teams to compete.
There remain huge concerns about the grass roots development of the English game, however, in addition to the long-term future of any club that exists outside of the top flight. These are areas that require immediate attention, so that the next television deal makes adequate provisions for the British game as a whole.