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New figures show how rich will get richer as Premier League clubs change overseas TV cash split

5 years ago
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One thing guaranteed with the richest and most powerful Premier League clubs, is the fact that they will always be looking at ways to increase their wealth and power.

Whilst all 20 Premier League clubs benefit from the amounts of cash generated by the most successful domestic league (in terms of money), as compared to other competing European leagues.

Anything that increases the gap between those at the top of the Premier League and the rest, can’t be a good thing.

The new domestic and overseas TV contracts are set to kick in with the 2019/20 season for the next there years.

In advance of those, clubs in the ‘big six’ were determined to push through changes to how overseas TV cash is distributed. Unlike the domestic TV deals, overseas money had always been distributed equally.

However, with overseas money getting ever bigger whilst domestic ones have maybe plateaued out, in the future overseas money could even overtake the domestic totals.

In June 2018, the Premier League at last announced (see below) that they had ‘persuaded’ the rest to agree to changes in how overseas money is divided up.

They present it as rewarding/encouraging competition but seen as the same clubs almost every year fill the top spots, it is simply a case of the rich becoming richer and the divide to the rest growing further. At the moment 13 points is the gap between sixth and Wolves in seventh, whilst only 15 points is the gap between Wolves and Cardiff in the relegation zone.

With most overseas TV contracts now agreed, The Telegraph have put figure on how things will change next season.

As of next season, Premier League clubs will all get £40.7m (the same as last/this season) each from overseas TV deals per year.

However, a separate pot estimated to be around £250m will be based on your league position.

Whoever finishes 20th next season (2019/20) would get £1.19m, right up to an extra £23.8m for the champions. Each place worth an extra £1.19m.

If the cash had been evenly split, each club would have got another £12.5m to go with their basic £40.7m, making it over £53m from overseas deals for all clubs.

Basically, if you finish in the top half you will benefit from the new arrangement.

For example if Newcastle repeated last season’s 10th spot, they would get an extra £13.09M, whilst 11th would be £11.9m, te two amounts either side of the £12.5m average if evenly distributed.

To some of you these might not seen like great amounts but if you are a club who will repeatedly finish in that top six, you are talking about a bonus £10m every season, £100m over 10 years. Plus of course if overseas TV cash continues to grow as expected, those figures could be dwarfed by future deals.

Premier League Official Statement – 7 June 2018:

From 2019/20, increases in international broadcast income to be distributed based on where clubs finish in League

Premier League clubs have agreed a new formula for sharing any future increase in international broadcast revenue from season 2019/20 onwards.

The League currently distributes all international broadcast revenue equally between the clubs.

From season 2019/20, clubs will continue to share current levels of international revenue equally, but any increase will be distributed based on where they finish in the League.

When total central revenues were distributed in 2017/18, the ratio between the maximum and minimum a club received was 1.6:1 – the highest-earning club received 1.6 times the amount received by the lowest-earning club.

The new formula for sharing any future increase in international revenues caps the ratio at 1.8:1.

This means the maximum that a club can receive in total central revenue payments is 1.8 times the amount received by the lowest-earning club.

Should future revenues rise to the point where the cap is reached, any additional income will be distributed so the 1.8:1 ratio is maintained.

“When the Premier League was formed in 1992 nobody could have envisaged the scale of international growth in the competition which exists now,”

Premier League Executive Chairman Richard Scudamore said.

“Back then the clubs put in place a revenue sharing system that was right for the time and has served the League well, enabling them to invest and improve in all areas.

“This new agreement will continue that trend with a subtle change that further incentivises on-pitch achievement and maintains the Premier League’s position as the most equitable in Europe in terms of sharing central revenues.

“By coming together and agreeing this change, the clubs have provided a platform for the future success of the League for many years ahead.”

In the Premier League’s inaugural season, 1992/93, the ratio between the maximum and minimum a club received from central revenues was 2.1:1

“This new agreement will maintain the Premier League’s position as the most equitable in Europe in terms of distributing central revenues.

“The ratio in 2017/18 was 1.6:1 and under the new system from 2019/20 could rise to a maximum of 1.8:1

The League’s UK broadcast revenue, 50 per cent of which is shared equally between clubs and 25 per cent each of prize money and broadcast facility fees, will continue to be distributed in the same way it always has been, as will central commercial revenues which are shared equally.

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