The English Premier League is by far the most popular and watched football league in the world. It is watched by over 3 billion people across 180 countries. Although football clubs started operating in the English Football League in 1888, the Division One clubs resigned from the EFL to form the EPL in 1992. Since then, the industry has seen an astronomical rise in popularity and revenue.
Like other sports leagues around the world, the FA has built an impressive business model around ticket sales, sponsorships, and broadcasting rights for the English Premier League. Leveraging the 3 billion viewers to commercialise TV rights was a stroke of genius and represent the EPL’s biggest source of revenue. A lot of fans wonder where the EPL money flows from, but never think to ask. Here’s how everything is set up.
The English Premier League football clubs lend their broadcasting rights to the FA. The Football Association then licenses broadcasters like BT (British Telecom), and Sky Sports to stream the league games. These broadcasters usually bid for rights to become the official broadcasting partners of these league games.
Ultimately, the revenue generation for the rights-holders trickles down to charging subscription fees to football fans and placement fees to companies that wish to advertise during matches. Revenue derived from domestic TV rights is distributed in the following manner.
Each one of the 20 PL football clubs gets an equal share from 50% of the revenue. Each club’s position in the league earns it a bigger share of what is called merit fees. Merit fees constitute 25% of the broadcasting rights revenue. The last 25% is allocated to facility fees, which depend on how often the football matches appear on TV.
Apart from selling broadcasting rights, the English Premier League also rakes in income from merchandise sales and sponsorship deals. Naturally, revenue from these sources is shared equally among all the clubs.
Football betting is now, virtually, part and parcel of the entertainment. It, therefore, shouldn’t come as a surprise that the betting industry has hitched itself to the world’s most popular football league. Half of the football clubs in the Premiership have a gambling sponsor on their jersey.
If we shift to the EFL Championship, the proportion rises to 17 out of the 24 clubs. The EFL Championship itself is sponsored by Sky Bet. However, the gambling industry’s sponsorship of the Premier League isn’t limited to jerseys, some betting companies sponsor entire stadiums.
For example, Stoke City is owned by the same family that owns Bet 365, which is why their stadium is named after the bookie. A study of BBC’s football highlights program revealed that the gambling industry displayed logos for up to 89% of the show’s running time.
However, in the recent “whistle-to-whistle” ban, the betting industry volunteered to stop advertising during football matches. How the league revenue dynamics will shift is still to be seen, but the EPL still has other revenue streams available.
Let’s dive one level deeper and inspect how the individual clubs’ finances appear. Premiership clubs have two main sponsors – jersey sponsors and kit manufacturers. Kit manufacturers like Adidas and Nike usually pay football clubs a fixed yearly amount or a percentage of sales. Jersey sponsors, on the other hand, pay to have their logos printed on the front of the club’s jersey.
If we take Manchester United, for example, the club received a £75 million per year deal from Adidas to design the kits. Meanwhile, Chevrolet signed a £64 million per year deal to sport their logo on the Red Devils jersey. To capitalise even more on their jerseys, some English Premier League clubs are also allowed to have a sleeve sponsor.
Matchday Ticket Sales:
One of the most obvious revenue streams for Premier League teams is the match-day ticket sales. This is the income that each team earns when they host games on their home ground. Tickets sales depend on the stadium capacity, as well as each team’s fan base. Of course, ticket prices also make a difference.
In the 2019/2020 season, Arsenal sold the most expensive match-day ticket for £97. Manchester United’s Old Trafford takes pole position for having the league’s biggest stadium, with a capacity of around 75,000.