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Premier League new TV deal - how will it impact clubs?

Writer's picture: Andrew ZarbAndrew Zarb

The Premier League agrees a deal with both domestic and overseas TV providers for coverage of its League matches during the season, for a period of three seasons. The last TV deal ran from 2016 through 2019 (the 2016/17, 2017/18 and 2018/19 seasons), and now the Premier League negotiated a new TV deal from 2019 through to 2022. At the end of each and every league season, the Premier League distributes money to its clubs, in part equally shared and partly on merit. In relation to domestic TV money, 50% is distributed equally between the clubs as equal share, 25% is distributed on merit (with the bottom club earning a fixed sum, e.g. £1m, and then the next club earning £1m more and so on), whilst the remaining 25% is distributed according to the number of teams a team appeared live on TV. In addition, there is the overseas TV money and previously this was equally distributed between the clubs. Furthermore, there is an amount of commercial revenue split equally between the 20 clubs.

It is understood that the amount of money from domestic TV deals has decreased slightly from the previous TV deal (reportedly from around £4.3m to £3.9m for the three-year period), whilst the amount of money from the overseas TV deals is said to have increased considerably (reportedly from around £2.5m to £3.3m for the three-year period). Under the previous TV deals, such an increase in overseas TV money would have been equally distributed between the clubs. However, for the new cycle, it was agreed between the clubs that these such increases would be distributed according to finishing position.

There are two arguments here as to whether the idea is a good one or not. Critics would argue that it is a case of the rich getting richer and the poor getting poorer, as the clubs finishing higher up would of course get more money than those finishing at the bottom - and thus some see it as a move intended to favour the top six (these are normally considered to be referring to: Manchester City, Liverpool, Chelsea, Tottenham Hotspur, Arsenal and Manchester United). On the other hand, advocates of such an idea would argue that it encourages teams to finish as high up the league as possible.

Pictured below is the prize money that was distributed to Premier League clubs during the 2018/19 season:

The amount of money each Premier League club received during the 2018/19 season

Under the previous deal, as stated earlier, the increase in overseas TV money would have been distributed equally amongst the clubs, however, this (increase) now will be distributed according to finishing position (the increase is said to be of roughly £300m a year on the previous deal). Thanks to the very reliable Swiss Ramble, here is an estimate of how, if it is to be assumed each Premier League club had the same number of games shown on TV as during the 2018/19 season, the money would be distributed under the 2019-22 TV deal.


Rough estimate of Premier League prize money distribution for the 2019/20 season

Therefore, one can clearly see in the image above that such an increase will reward teams finishing higher up. For that matter, during the 2018/19 season, despite winning the league Manchester City did not receive the most money (the most went to Liverpool), but under the new deal Manchester City would receive the most money. Under the previous deal, the £295.3m quoted would have been equally distributed between the clubs, meaning an increase of roughly £14.8m per club. Now, instead all clubs finishing above the top 10 would get an increase of larger than the £14.8m quoted, whilst the bottom 10 would get a lesser increase in total, as per the image provided above.


The criticism that such a move would benefit the top six clubs the most certainly be justified, as for example champions Manchester City would receive an estimated £171.5m whereas during the 2018/19 they received a total of £150.9m. In fact, during 2018/19 season the top 6 clubs received a total of £879.3m from a total of £2.46bn (roughly 36%), whereas in the 2019/20 the top 6 clubs would receive roughly £983.2m in total from a total of £2.64bn (approximately 37%).

How much is promotion to the Premier League going to be worth for the clubs who have been promoted for the 2019/20 season?


Norwich City, Sheffield United and Aston Villa were the three clubs who earned themselves promotion to the Premier League for next season. If the minimum amounts were to be taken for a promoted club, for the 2019/20 season it would receive a minimum of £94.4m (this amount could increase depending of course on the number of times the club is shown live on TV) during their Premier League season, whilst then receiving a parachute payment which is made up of the equal share of domestic and overseas TV rights (totalling roughly £75m) over a two-year period split in the ratio of 55:45 (i.e. 55% during the first year after relegation, 45% in the second) - assuming that club does not earn promotion back to the Premier League during these 2 years. If a promoted club were to survive their first Premier League season, they would earn a minimum of around £104m during the first season (this could increase depending on the number of live TV matches shown), around £94.4m minimum during the second season and then the parachute payment (totalling roughly £75m) over 2 years split into the ratio of 55:45, whilst an additional 20% during the third year after relegation - assuming that club does not earn promotion back to the Premier League during these 3 years. Therefore, promotion to the Premier League under the new TV deal will still be worth a minimum of roughly £170m, and if a club survives during their first Premier League season, this amount would increase to approximately £290m - highlighting the riches on offer to clubs aiming to reach the Premier League and may also explain why many Championship clubs make massive losses in a bid to earn such lucrative money. Conclusion One can clearly see how, in the analysis above, being in the Premier League can be financially very rewarding for clubs. Additionally, with the new TV deal, it may be very clearly highlighted how important is to have a good finishing position.

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