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As the 2018/19 Premier League season approaches, I thought that it might be interesting to look at the impact of the new three-year TV deal on clubs’ revenue, particularly the changes in the distribution system for the overseas TV deals. Some thoughts in the following thread.
As a reminder, in 2018/19 each club received equal shares for 50% of domestic TV £34m, overseas TV £43m and commercial income £5m. Each league position was worth £1.9m (merit payment), while each match broadcast live was worth £1.1m (on top of £12.2m for a minimum of 10 games). 
Total PL TV rights for 2019-22 cycle rose 8% (£0.7 bln) from £8.5 bln to £9.2 bln. UK domestic rights actually dropped 7% (£0.4 bln) from £5.4 bln to £5.0 bln, but this decrease was more than offset by overseas rights increasing by 34% (£1.1 bln) from £3.1 bln to £4.2 bln.
The increase in PL overseas TV rights is particularly striking. These now average around £1.4 bln a year, up from £1.1 bln in the 2016-19 cycle. As recently as 2007-10, these were only worth £200m a year.
As former Premier League Executive Chairman Richard Scudamore said, “When the PL was formed in 1992, nobody could have envisaged the scale of international growth in the competition.” Hence, the increasing interest of the Big Six in how the overseas revenue is distributed.
To reiterate the growing importance of overseas rights, they are now worth almost as much as UK domestic rights: 45% compared to 55%. In 2001-04, they only accounted for 11% of the total. It would be no great surprise if they overtook domestic rights in the next 2022-25 cycle.
Overseas TV rights have always been distributed as equal shares by the Premier League, but this was changed in the 2019-22 deal. Clubs will continue to share current levels of overseas revenue equally, but any increase will be distributed based on where they finish in the league.
Based on the 7% fall in domestic rights and 34% increase in overseas rights, domestic revenue will drop by £110m, but overseas revenue will rise by £295m, resulting in a net increase of £185m a year to be shared among the 20 clubs in the Premier League.
The change in distribution for overseas revenue means that final league position is increasingly important. As Scudamore put it, this is “a subtle change that further incentivises on-pitch achievement.” Well, yes, though it is also likely to further grow the gap to the Big Six.
One result of the change in overseas rights distribution, exacerbated by the fall in domestic rights, is a big difference in the additional income from the new TV deal. For example, the increase for the 1st placed club £21m will be twice as much as the 10th placed club £10m.
If the current distribution system had been applied to the new 2019-22 deal, the additional £185m would have been shared much more evenly, so the revenue for the Big Six would have been restricted, e.g. #LFC would have earned “only” £160m compared to £172m with the new model.
In fact, the teams in the bottom half of the Premier League would have benefited more than those in the top half, due to the fall in domestic rights. The 20th placed team would have received an additional £11m, while the 1st placed team would have got an extra £7m.
Looked at another way, the top 10 clubs all benefit under the new distribution model, while the bottom 10 clubs would have done better under the current system. As an example, #MCFC will earn £71m from overseas rights, i.e. £13m more than they would have with the old approach.
In summary, all 20 Premier League clubs will earn more from the overseas rights increase, but it will be yet another case of “the rich getting richer”. In fact, half of the total £295m increase goes to just six clubs. No prizes for guessing which ones.
Estimated #LFC Premier League TV money for 2019/20, based on same league position and live TV games, would increase by £19m (12%) from £152m in 2018/19 to £171m. This means that their PL TV revenue would have grown by £25m (17%) from £146m in 2017/18.
Estimated #MCFC Premier League TV money for 2019/20, based on same league position and live TV games, would increase by £20m (14%) from £151m in 2018/19 to £171m. This means that their PL TV revenue would have grown by £22m (15%) from £149m in 2017/18.
Estimated #CFC Premier League TV money for 2019/20, based on same league position and live TV games, would increase by £18m (12%) from £146m in 2018/19 to £164m. This means that their PL TV revenue would have grown by £22m (16%) from £142m in 2017/18.
Estimated #THFC Premier League TV money for 2019/20, based on same league position and live TV games, would increase by £17m (12%) from £145m in 2018/19 to £162m. This means that their PL TV revenue would have grown by £18m (12%) from £144m in 2017/18.
Estimated #MUFC Premier League TV money for 2019/20, based on same league position and live TV games, would increase by £14m (10%) from £143m in 2018/19 to £157m. This means that their PL TV revenue would have grown by £7m (5%) from £150m in 2017/18.
Estimated #AFC Premier League TV money for 2019/20, based on same league position and live TV games, would increase by £16m (11%) from £142m in 2018/19 to £158m. This means that their PL TV revenue would have grown by £16m (11%) from £142m in 2017/18.
The Premier League noted that the maximum that any club can receive in total payments is 1.8 times the amount received by the lowest earning club, up from the current 1.6 times. My estimates indicate that the ratio would indeed be 1.8 (though still the most equitable in Europe).
On the one hand, it is difficult to argue with the Big Six’s view that they deserve more, as overseas fans are more interested in watching their games, but on the other hand the change in distribution makes it even more difficult for anyone to break into their exclusive club.
Incidentally, it might also damage the “product”, as there is a risk that the Premier League becomes less competitive. The possibility of top clubs losing against less fancied opposition has been one of the competition’s key selling points up to now.
The impact on EFL clubs also remains to be seen, as their payments are currently based on an agreed percentage of the Premier League revenue that is equally distributed. In theory, that would imply that they will not benefit from the steep growth in overseas revenue.
