How Sky Sports bankrolls the Premiership

As Wolves and Wigan celebrated their Premiership survival on Sunday both club’s can look forward to another cheque of around £40m from television revenues next season.

Blackpool’s heart-ache will be cushioned by the £39.1m they picked up for their season in the top flight with four years of parachute payments to help them back to the promised land.

For winning the SPL Rangers can expect to pick up around £2m television money- a twentieth of the fee that Blackpool will collect to emphasise the difference between the two leagues.

James Kent of Football Fancast has gone through the Premiership television figures- if your name is Peter Lawwell or Dermot Desmond it’s probably best to click on to something else at this point

Kent writes: “The latest figures on TV cash and Premier League prize money made interesting reading if you’re a Manchester United fan. The Red Devils earned a record breaking £60.4m which was an increase of £7m on the previous year from overseas TV deals.

The figures really show the importance of being in the Premier League, but also of being successful. These sorts of figures are likely to take on added importance when the financial fair play rules get into full swing. It’s clear that clubs that finished near the top the previous season will gain an immediate advantage over teams that finish lower down.

However, even a single season in the Premier League can be hugely lucrative to a club’s finances and will give them a significant advantage over Championship clubs the following season and presents an opportunity to clear debts. This point is especially true when you also take into account the parachute payments paid over the following four seasons after relegation; Blackpool being the lowest earners in the Premier League but still receiving £39.1m. With these sorts of numbers it’s easy to see why clubs are so keen to get into the Premier League and why they will really push the boat out financially to try and get there. The next best earners were Chelsea with £57.7m, Arsenal £56.2m and Manchester City £55.5m.

Now there is obviously some difference between the earnings at the top and the bottom, but the difference is actually quite small in comparison with other leagues in Europe. England’s top club earned 1.54 times as much as the bottom in TV money. The gap is actually closing because this number was 1.66 the previous year. To put things into perspective it can be interesting to look at La Liga in Spain where TV money is negotiated on a club by club basis and there is quite a significant difference between the top and the bottom. Real Madrid and Barcelona earn 12.5 times more than the smallest clubs in La Liga.

Many people have commented on the competitive nature of the Premier League this season, but does the income distribution play any part in this? Well Premier League chief executive Richard Scudamore believes this to be the case.

Scudamore said “We believe that our income distribution mechanism, the most equitable of Europe’s major football leagues, rewards sporting success while also guaranteeing a significant amount to each club in order that they can plan from one season to the next.”

He went on to say “Many have commented on the competitive nature of this season’s Barclays Premier League. “The clubs deserve huge credit for putting on fantastic competition. We believe the way we distribute broadcast income plays a part in allowing each club to compete at the highest level.”

The Premier League distributes TV rights money based on where they finish in the league, an equal share of TV money and the number of times each team appeared on TV throughout the season. Therefore, this season each club received £13.8m as the equal share of domestic TV rights and £17.9m as the equal share of overseas TV rights; each place in the Premier League table is worth £756,000 the amount West Ham received and Manchester United received £15.1m.

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