On Tuesday the Premier League announce a new television rights deal for 2016-19. The deal, which sees coverage shared between Sky and BT Sports is worth £5.136 billion. This is a 70% increase on the deal current deal Sky and BT Sport have which is worth £3 billion, and a long way from the £191 million original struck at the start of the Premier League for its first five seasons.
New Premier League TV Deal
The new deal means that the rich get richer, and the importance of staying in the Premier league is ever more paramount. As of 2016 the team finishing bottom of the Premier League will receive an approximate £99 million in prize money up from the £62.1 million Cardiff received for finishing bottom last season. That will be more than current Champions Manchester City won last year (£97.7 million). As a result of the deal the winners will receive approximately £156 million.
Will this new influx of cash, into a game already awash with money mean a fairer redistribution of wealth? No. In reality there is more chance of Sepp Blatter saying “I’ve had my term as FIFA president time for someone else to have a turn”. Lots of questions have been asked about who will benefit from this money, Will there be big investment in grass roots football? Will it filter down the football pyramid? Will the clubs use the money to reduce ticket prices for fans? Again the answer to all of these is no. Yes the Premier League has announced that £56 million will be put into a grass roots project. £56 million is not a small amount of money by any standards, however it put into stark context when a club pulls in almost twice that for finishing in last place.
Sports Minister Helen Grant has the Premier League’s new TV deal should bring “increased benefits to clubs lower down the football pyramid”. This again is unlikely as previous deals have not filtered down to lower league clubs in any other form that increased parachute payments to clubs relegated. Richard Scudamore, chief executive of the Premier League, responded to those like Grant who have called for the League to share the wealth of its new deal by saying “We’re not set up for charitable purposes. We are set up to be the best football competition.” This is very true the Premier League is a brand and its clubs businesses, and in the age of financial fair play the clubs will be investing their new revenue in two things – player transfers and player wages. Clubs abroad and player’s agents will not be ignorant of the money coming into these clubs and will want their share of the pie. They are also they two stakeholders in a position of power that can ensure that they get it. If clubs want to acquire the best talent from around the globe they will have to pay the demands of clubs, players and agents.
Many fan groups have been calling for clubs to make football more affordable and this deal has seen renewed calls for clubs to lower ticket prices. This is again unlikely. It is a simple matter of supply and demand. Clubs can afford to charge exorbitant prices and still sell out their stadiums, so where is the incentive to lower costs? The best fans can really hope for is a price freeze. In 2013 when the TV deal last moved from a £1.77 billion deal to a £3 billion deal, of the Premier League’s top 6 teams, 4 clubs froze ticket prices (Manchester United, Arsenal, Chelsea and Tottenham Hotspur) while the other two increased prices (Liverpool and Manchester City) despite TV revenues almost doubling.
The Premier League’s brand continues to grow and so does the revenue it brings in. At just over £5 billion this deal may not even represent the peak. With financial fair play being a bigger factor in teams planning the pressure to make more revenue to cover the increasing cost of players fees and wages. Richard Scudamore’s statement that the Premier League is not a charity is one of the most honest statements in football. All those expecting this money to trickle down the football need only look at the Premier League’s history to realize they will be disappointed.
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