Media: Premier League overseas broadcasting deal to exceed £4 billion
28 March 2019
New Premier-League formula of merit payments sees financial gap between ‘big six’ and rest of Premier League grow by up to £75 million with foreign TV deal.
Surplus from overseas rights will be divided according to position in the league.
The current overseas TV rights deal for the Premier League is about to end, and the rights for 2019-2022 are close to being established. According to research done by The Telegraph, the value is set to exceed £4 billion for the first time ever, giving a major boost to the Premier League after seeing the value of the domestic broadcasting rights fall.
According to Telegraph , the champions each season stand to receive almost an extra £25 million from overseas rights. This is because of a new formula being used to divide up international broadcasting rights, which will put an end to equal shares.
Currently each club receives £40.7 million per year from overseas broadcasting rights regardless of league position, but changes to the way foreign rights are distributed means that the surplus in the overseas rights from the current £3.3 billion to £4 billion will be divided by the Premier League’s formula of merit payments.
Widening gap between top and bottom
As things stand there is no financial gap in the overseas rights as each club in the Premier League receive the same amount, but with the new formula to divide up the surplus, this will mean a difference of £75 million between the top and the bottom clubs over three years, according to Telegraph.
This could mean in the end that it will become even harder for teams to break into the top six, and the polarisation in the league will heighten.
Premier League to earn majority of broadcasting rights abroad
Should the new overseas broadcasting rights rise to £4 billion, this will mean that the Premier League’s value of broadcasting rights will still increase. The total figure for 2016-2019 was £8.6 billion with the new deal ending up at around £9 billion in total for the period 2019-2022.
Domestic broadcasting rights are viewed as being at a saturation point making the Premier League increasingly dependent upon foreign rights. Overall, foreign rights are to make up 46 per cent of the total broadcasting rights for 2019-2022. That number was 39 per cent in 2016-2019 and just 11 per cent from 2001-2004.
If this trend continues, it could mean that in the period 2022-2025 the Premier League will become the first major sports league to earn a majority of its broadcasting rights abroad.