For the first time in the league’s history, the combined revenues of the 20 teams in the Barclays Premier League are expected to combine for $4.67 billion next season, according to Deloitte LLP.
This new collective sum would be an estimated increase of $933 million, reports Bloomberg, which is an increase of approximately +25% versus the 2012/13 season. Revenues rose by +4% versus the prior season in 2011/12 to a record $3.7 billion, due to new sponsorship deals from Manchester United and Manchester City with Deutsche Post AG’s DHL and Etihad Airways respectively. The rose again another +5% in 2012/13 versus the 2011/12 season, according to Deloitte’s Annual Review of Football Finance. If the last two seasons have only produced mid-level single digit revenue growth, what then is to be responsible for the +25% increase next season that will drive revenues skyward in the Premier League?
The majority of the growth will come from the first year of new domestic and international broadcasting deals in the Premier League with British Sky Broadcasting Group Plc. and other companies, according to Bloomberg. Deloitte talks about these new deals in its 2012 edition of Football Money League:
In 2012, the Premier League announced new domestic live broadcast rights deals worth just over £3 billion for the three year period from 2013/14, a 70% increase on the previous value. Domestic and overseas broadcast arrangements for England’stop-flight are likely to generate over £5 billion over the three year term.
The new deals will deliver a step change in broadcast distributions for England’s top clubs who are each set to benefit from an incremental increase of between £20m and £30m per season (Deloitte, “Football Money League”, p.7).
The numbers behind these new deals throw into shock the importance of broadcasting rights in the world of soccer, and what impact they can have for a league. For a market as established as the Premier League to grow by that significant a margin is nothing short of astronomical. Yet, it illuminates the fact that the Premier League, as established as it may be, still has room to grow – as is evident by the Asian expansion plans from many BPL clubs, such as Manchester United and Chelseas FC. As time progresses, and the league doesn’t have new broadcasting deals of this magnitude to rely on growth for, it will look to marketing success and increased brand awareness in the world’s emerging markets like China, Brazil, and Russia.
According to the same report, the Bundesliga also made significant progress in this area as well, securing domestic deals that will increase its revenues from broadcasting rights by “more than 50%” from the current state. Even though the BPL generated the most revenue of the top leagues in the world, the German Bundesliga was the most profitable, according to Bloomberg. The Premier League clubs produced about $152 million in profit combined, while the Bundelsiga clubs together were able to squeeze out $239 million of operating profit due to stricter licensing rules that limited teams’ spending on player’s wages, according to Deloitte.
This type of growth is most definitely a positive, but as any businessman will tell you, how does the BPL comp these numbers the following year?
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