eBusiness Weekly
The 20 clubs in the English Premier League will receive all of their prize money for the 2019-20 season having agreed to defer Covid-19-related rebates to broadcasters and spread them out over future seasons.
It has been reported that clubs will have to repay broadcasters roughly £330 million after the season was suspended due to the pandemic and then resumed behind closed doors in June.
The clubs’ decision to defer the repayments was taken at last week’s annual general meeting of club chairmen and chief executives because the league continues to negotiate the extent of the rebates with its 55 domestic and international broadcast partners, The Times reports.
As a consequence, clubs will receive the full amount due to them for the 2019-20 season, the first year of a new distribution model for overseas rights in which a proportion of prize money is based on where a club finishes in the league.
This means top-ranked clubs will still reap the greatest benefits of the recently completed 2019-20 to 2021-22 sales cycle which delivered a 35-per-cent increase in the value of the league’s international media rights, to £1,457 billion per season from £1,079 billion per season in the 2016-17 to 2018-19 cycle.
The increase helped to offset a 7,8 per-cent decline in domestic rights values as competition between Sky and BT cooled. Overall cycle-on-cycle growth for the league, including domestic and international media rights, was eight per cent, from £2,907 billion per season in the 2016-17 to 2018-19 cycle to £3,143 billion per season in the 2019-20 to 2021-22 cycle.
Football finance blog, SwissRamble, estimates the increase will be worth £185 million shared between Premier League clubs, with champions Liverpool receiving £175 million overall for this season. Last season (2018-19) Liverpool received £150 million as runners up while champions Manchester City received the same sum.
The payments are calculated on an equal share of domestic TV revenues, the share of overseas revenues based on finishing position, payments for TV appearances and merit payments for league placings.
The clubs also share the league’s much smaller commercial revenues generated by sales of the league sponsorship rights and licensing.
The Athletic predicts that the league will ultimately have to pay £223 million in rebates to domestic broadcasters and a further £107 million to international broadcasters.
The league is also assessing its options after its rights-holding broadcaster in China, streaming platform PPTV, is reported to have failed to make a rights-fee payment worth £160m due earlier this year.
PPTV has a deal with the league worth around $233 million per season for the three seasons from 2019-20 to 2021-22.
The Times reports the delay in the payment is due to Covid-19 related financial issues for the broadcaster and not political.
There had been fears that it was related to the British government’s decision to ban Huawei Technology from the UK’s 5G network and its criticisms of new security laws in Hong Kong.
Premier League clubs are said to be considering options including demanding an immediate payment, negotiating a revised payment schedule, or terminating the deal.
At the same meeting, the clubs are understood to have sanctioned another advance of solidarity payments to English Football League clubs. The Premier League had already made a £125 million payment to the lower-tier clubs in April that was originally due in August. — Sports Business.
