Last year, the top six Premier League teams were unsuccessful in securing an agreement which would have ended the equal split of all income generated from international television channels amongst the 20 Premier League teams. Liverpool owner, John Henry had been especially vocal about ending the continued subsidising of the lower-ranked football clubs within the PL.
The Old Regime
This divisive issue was the main talking point at this past Thursday’s annual Premier League summit meeting. In October 2017, half of the clubs accepted the ruling that 35 percent of the foreign television revenue be dispersed based on league position, however, to implement the change, approval was required from 14 teams. Domestic television revenue has always been allocated on meritocracy with half of the proceeds being split based on league position and live appearances across British TV channels whilst the remaining half is shared equally with each team receiving approximately giving each team an amount of 34.8 million GBP.
John Henry spoke with The Associated Press regarding his continued frustration with the status quo prior to Thursday’s meeting and said;
It’s a disagreement based entirely on governance. Everyone in the league knows what the large clubs bring to the value of foreign rights, but the large clubs do not have the votes to change something that should have changed as media rights changed over the past 25 years. You cannot stick with the same media strategy forever any more than you can stick with the same football tactics forever.
Because of this arrangement (the distribution of overseas revenue) and due to parachute payments to relegated clubs, the top three clubs each year in the Premier League receive less overall TV monies than the bottom three clubs when you include parachute payments. It’s hard to imagine this continuing much longer. In America, where we have closed leagues, you can argue for these types of arrangements, but it’s much more difficult to ask independent clubs to subsidise their competitors beyond a certain point when you have relegation and especially with the way media is rapidly changing and being consumed today.
English football was not nearly as popular in 1992 when the original agreement was reached, with the beautiful game marred by crowd disorder and hooliganism.
Liverpool’s International Appeal
Liverpool’s earnings for the 2017-18 PL season was 145.9 million GBP and they earned an addition 32.8 million GBP for finishing fourth in the league. Liverpool made more money than the top three and banked 32.7 million GBP (along with sixth placed Arsenal) which was based on their Premier League appearances in Britain. However, thanks to the old distribution model, even 20th placed West Bromwich Albion received 94.7 million GBP which was bulked out by the foreign TV cash because a club’s popularity is not taken into consideration – despite being relegated to the Championship.
Liverpool chairman, Tom Werner and chief executive, Peter Moore represented the club on Thursday as a final consensus was reached. After the meeting it was confirmed that as of the 2019 summer, the overseas television cash will be split determined by league position and no longer equally shared between the 20 Premier League clubs. As of the 2019-20 season, the champions of the PL will earn 80% more than the team that finishes last. While the current ratio is 1.6:1., the new distribution ratio will be on a 1.8:1 basis for the total pot of central revenues which is made up of domestic and international broadcast rights and sponsorship deals.
The Premier League also announced a new international broadcast agreement with the sale of 233 live matches a season to BT, Premier Sports and Sky for the Irish market, with Amazon and BT purchasing the two remaining packages of domestic Premier League rights.