The latest Premier League AGM took place on Thursday.
One of the big stories to come out of it was an agreement for a change in the way International Revenue (basically overseas TV deals cash) was divided amongst the 20 clubs.
So far, all of that money has been divided equally between all clubs, whilst the cash from the UK TV rights has been divided up depending on where each club finished in the league each season, as well as how often a club was featured in live TV games.
Last Autumn, Premier League Chairman Richard Scudamore spoke to the other 14 clubs on behalf of the ‘big six’. He put forward proposals that would mean in future, international revenue would also be divided amongst the clubs depending on were you finished in the table, with 35% of the pot decided by that means.
Not surprisingly, the ‘rest’ overwhelmingly rejected the greedy proposal, as it would make the vast majority of them worse off, compared to what happens at the minute.
So it was with some surprise when ahead of Thursday’s AGM, Liverpool owner John Henry revealed that they weren’t giving up and were insistent that there had to be changes, whereby the rich would get richer, rather than having to ‘subsidise’ the rest so heavily (according to him).
Your average football fan was bemused, why would the ‘rest’ vote any differently this time?
The vote was surprisingly carried, with the changes to come in from 2019/20, with any additional international revenue to be now divided on a sliding scale. The Chronicle reported that Newcastle United were one of the clubs who had indicated they would vote for the change.
A lot of people assumed that threats had been used to ‘persuade’ the other 14 Premier League clubs, as why else would they vote for it. Exactly what the threat could be was a mystery, as any thoughts of a breakaway European Superleague look to be old news these days, considering just how much the top English clubs earn from both the Premier League and Champions League.
It turns out that it wasn’t threats at all, we should have guessed really, it was plain simple greed from the rest as well.
Kiaran Maguire lectures in football finance at Liverpool University and also has his own Price Of Football website, he explains exactly why….
“Under present Premier League TV rights rules, for every £100 million extra income EPL takes £73.05m and remainder is split between parachute and solidarity payments.
“An EPL club would take £3,650,000 and League 2 club would get £32,000.
“Under new rules nothing for parachute and solidarity.
“(Liverpool owner) John Henry’s concerns that his franchise in the EPL was ‘subsidising’ other clubs would also be satisfied.
“It would prevent greedy clubs such as Morecambe, Grimsby and Yeovil being given an extra £315,600 if the overseas rights increased by an annual £1,000,000,000 (£1bn) for example.”
So basically, the 27% of extra International Revenue (additional money on top of current levels) that would have previously gone to the 72 EFL clubs and the three relegated from the Premier League, is instead going to only be divided amongst the 20 PL clubs.
With the UK TV rights now standing still at best, the overseas TV rights are clearly where the Premier League clubs see the growth being at.
The totals agreed for the three years starting 2019/20 haven’t been revealed yet but are expected to show a significant increase, the 20 PL clubs will of course already be aware of how those new International Revenue totals are going to look. The fact the big six have been so desperate to get these changes pushed through, suggests that there is decent money at stake here.
So whilst those at the very top will benefit even more from the changes, by taking away the additional future money from the 72 EFL clubs (and that would have added to parachute payments), they have used that as the carrot to get enough of the ‘rest’ to agree – 14 of the 20 clubs needing to vote to make any change.
Kieran Maguire has indicated that if there are decent levels of increase in International Revenue, then almost every PL club is guaranteed to benefit with this change, as compared to if things had been left the same, and the 72 EFL clubs had also continued to benefit from any additional revenue.