An article by @martynziegler in The Times revealed that the estimated £330m rebate on the Premier League TV deals arising from COVID-19 delays in screening matches will be spread out over future seasons. We can therefore estimate the payouts for the 2019/20 season.
As a reminder, in 2018/19 each club received equal shares for 50% of domestic TV £34m, overseas TV £43m and commercial income £5m. Each match broadcast live was worth £1.1m (on top of £12.2m for a minimum of 10 games), while each league position was worth £1.9m (merit payment).
However, the story has changed with the new 3-year deal for the 2019-22 cycle, as the numbers have moved and there is a twist in the distribution methodology used for the overseas TV rights. This is important, as overseas is the area driving the growth in TV money.
Total Premier League TV rights rose 8% (£0.7 bln) from £8.5 bln to £9.2 bln. UK domestic rights actually dropped 7% (£0.4 bln) from £5.4 bln to £5.0 bln, but this decrease was more than offset by overseas rights increasing by 34% (£1.1 bln) from £3.1 bln to £4.2 bln.
As can be seen, the increase in PL overseas TV rights is particularly striking. These now average around £1.4 bln a year, up from £1.1 bln in the 2016-19 cycle, accounting for 45% of the total. As recently as 2007-10, these were only worth £200m a year.
Overseas TV rights were previously distributed as equal shares by the Premier League, but this was changed in the 2019-22 deal. Clubs will continue to share previous levels of overseas revenue equally, but the increase is distributed based on where they finish in the league.
Based on the 7% fall in domestic rights and 34% increase in overseas rights, domestic revenue will drop by £110m, but overseas revenue will rise by £295m, resulting in a net increase of £185m a year to be shared among the 20 clubs in the Premier League.
The change in distribution for overseas revenue means that final league position is increasingly important. As Richard Scudamore put it, this is “a subtle change that further incentivises on-pitch achievement”, though it is also likely to further grow the gap to the Big Six.
Of course, at some stage the Premier League clubs will have to pay the reported £330m rebate to the TV companies (domestic £223m, overseas £107m)., though only spread over future seasons. That works out to around 12% of the £2.6 bln total anticipated payments.
There is a good chance that part of the cost of the TV rebate will have to be borne by clubs receiving parachute payments and maybe promoted clubs, but I’ve kept my example simple for illustrative purposes.
Once again, I need to stress that these figures are only estimates, so might not be the same as the final distributions, but hopefully thus analysis gives a decent idea of how much each club will receive.
In any case, the decision to delay the rebate to TV companies will at least give some short-term financial relief to Premier League clubs.
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