Premier League’s elite secure change to TV revenue distribution model

The ‘big six’ clubs from football’s English Premier League have today (Thursday) succeeded in forcing through a change to the rules which will grant them a greater share of revenue the competition generates from international broadcast rights.

Today’s annual general meeting of the League saw a new formula decided upon for sharing any future increase in international broadcast revenue from the 2019-20 season onwards, when the competition’s next rights cycle takes effect.

The League currently distributes all international broadcast revenue equally between the clubs. In October, plans by the Premier League’s so-called 'big six' to drive through major reform to the way broadcast rights revenue is distributed were shelved, with the top division of English football stating it had become clear that there was currently no consensus for change.

The Premier League cancelled a meeting of shareholders scheduled for October 25 as it became apparent that opposition to the plan would mean that no deal would be reached. The announcement came after a meeting scheduled to discuss the new media-rights distribution model was adjourned on October 4 without an agreement having been reached.

A proposal presented by Premier League executive chairman Richard Scudamore suggested that 35 per cent of the global rights revenue should be divided between the clubs based on their final league position. Arsenal, Chelsea, Liverpool, Manchester City, Manchester United and Tottenham Hotspur have all been pushing for a larger share and today had their wish granted.

Any change to the rules required the approval of 14 of the League’s 20 clubs. From 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 receiving 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. The League said that 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.

Scudamore maintained today’s change still places the Premier League favourably when compared to systems in place in other major leagues. “When the Premier League was formed in 1992 nobody could have envisaged the scale of international growth in the competition which exists now,” 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. The League maintained that the new agreement will maintain the Premier League's position as the most equitable in Europe in terms of distributing central revenues.

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, as will central commercial revenues which are shared equally.