Barclays Premier League Clubs Split $2.6 Billion in Television Revenue

The 22nd season of the Barclays Premier League (BPL) ended with several surprises.  Manchester City claimed their second title in three years while their cross-town rivals, Manchester United, fell to a shocking seventh place.  Liverpool FC fought for a well-deserved second place finish after finishing seventh in 2013.

The excitement of the 2013/14 season seems to have paid off in the television revenue as well.  The twenty top-flight teams will share $2.6 billion (£1.5 billion) in total television revenue.  According to the BPL’s official website, 50% of the total revenue from UK broadcasting is divided evenly among all teams, 25% of revenue is “merit based” depending on how each club finished in the standing, with the final 25% of the revenue is given based on facility fees for the number of times a club was featured in a UK broadcast.

This television revenue sharing system is designed to even the playing the field in terms of exposure to the public.  Despite the fact that broadcasters would prefer to place teams such as Manchester City, Liverpool, Chelsea, and Manchester United on television to boost ratings, the league agreed to create a system that would give smaller clubs revenue and assert their value as a top-flight club.  The Premier League’s official website claims it is the most equitable television revenue sharing deal in all of Europe.

In 2014, teams will each be given nearly $36.3 million (£21.6 million) in domestic revenue.  League champion Manchester City will receive $41.5 million (£24.7 million) in merit-based pay while Cardiff City will receive only $2 million (£1.2 million) for their last place finish.  The top four teams heading to the UEFA Champions League next season will receive a combined $153 million (£91.8 million) in merit pay.  The bottom three teams to be relegated to the nPower Championship will receive $12.4 million (£7.4 million) in merit-based pay.

Despite the large gap in the merit-based pay, clubs still receive fairly equitable payouts when including oversees revenue.  Liverpool will receive a total of $163.6 million (£97.5 million) in television revenue, the most of all BPL clubs, while Cardiff City will receive $104 million (£62 million) in television revenue.  The most important factor in the amount of television revenue a team receives is the place they finish in the league.  Despite finishing second, Liverpool received slightly more television revenue than Manchester City.  Everton finished in 5th place but will only receive the 7th highest television revenue (behind Manchester United and Tottenham who finished below them in the standings).  However, almost all other clubs in the league received the amount of revenue appropriate for their final standing in the league.  By dangling the revenue carrot, this encourages clubs to be more motivated to spend additional money during the transfer windows to receive more television revenue.

Clubs in the BPL also evenly split revenue from “Oversees TV”.  Television revenue from oversees accounted for $881 million (£525.9 million) with each club receiving $44 million (£26.2 million).  The $881 million from oversees revenue is significantly more than the $725.4 million (£432.6 million) the league received in domestic television revenue.  This demonstrates the power and influence that the BPL has outside of the nation and even outside of Europe.  Part of the disparity in domestic and overseas revenue could be the addition of NBC as a partner.  The American television network allowed people from all over the world to access every single Premier League game through online platforms, including through mobile devices.  NBC’s coverage of the BPL has been lauded by many and has clearly paid off.

This shared revenue allows clubs to reinvest in stadiums, player development, transfer market, and the local community, according to the BPL’s official website.  The shared revenue maintains the competitive balance in the BPL as best as possible and contributes towards a better product to attract more fans to the league.

 

What do you think about the broadcasting revenue share out for the BPL this year? Let us know in the comments section below, or via Facebook or Twitter.

Reporting on the business side of the world's game.