If you’ve been checking the Premier League scores lately, then you may be one of the more than 3 billion viewers across the world tuning in to watch the league’s infamous matches. This is why broadcasting is the Premier League’s largest source of revenue. While broadcasting makes up a large portion of the money the leagues makes, it is not the only source.
Broadcasting
Within the 2016-19 cycle, the Premier League reached an exponential figure of £5 billion in the value of TV rights. This significant figure displayed a 70% growth of revenue compared to the previous cycle in 2013-16. As you can imagine, figures like these cause broadcasters to battle for TV rights. But how is this large amount of revenue divided throughout the league?
There is a system to clubs obtaining what is rightfully theirs. To begin, 50% of UK broadcast revenue is equally split between all 20 clubs. Now, 25% of broadcast revenue is paid in “Merit Payments,” which is considered prize money per place in the table. The remaining 25% of broadcast revenue is paid in “Facility Fees” for each time a club’s match is broadcast in the UK. There is also international broadcast revenue and central commercial revenue to consider, which is equally divided among all 20 clubs.
Subscription Services
With technological improvements and new media developments, subscription services are causing TV broadcasters to rethink their methods. The Premier League is now able to reach more viewers with the use of these services, which then leads to more revenue.
Commercial Revenue
This type of revenue is received through advertising and partnerships. The use of brand promotions through logos, banners, and other memorabilia is the main source for commercial revenue. Clubs that have a wide fan base globally are seen to have higher commercial revenues. It is also commonly seen that clubs with a massive brand image have larger revenues in this department.
Matchday Revenue
While matchday revenue is the smallest component of the Premier League’s revenue, it is still vital. These revenues are established through ticket prices, the capacity for fans at stadiums, food, and hospitality received while fans enjoy a match. The performance of the big six–which include Arsenal, Liverpool, Manchester United, Manchester City, Tottenham Hotspur, and Chelsea–is a big factor in revenue production for the league, as ticket prices are generally higher and more fans are typically seen at these matches. Clubs evaluate potential upgrades to stadiums and ways to increase their capacities to grow this source of income.
Fans
Regardless of the different areas that the Premier League’s revenue may come from, the fans are the main support system for the high revenues seen. Without fans buying tickets to a match, purchasing a club’s branded shirts, or watching a televised match, this sport would not be the most followed in the world.
