Unraveling the Premier League's Multi-Billion Pound Cash Influx
Financial Struggles and Celebrity Status: Explaining the Insufficient Prize Money Increase for Liverpool Following Their Title Win
The upcoming 2024-2025 season is set to witness a significant shift in the financial landscape of the Premier League, as the updated TV contract kicks off. Sky Sports and TNT Sports will fork over a whopping £6.7 billion for the broadcast rights from 2025 to 2029 - a staggering 4% increase compared to the current deal. This new agreement brings a palpable surge in the number of matches available for viewers, marking a new era for the league.
However, this season's revenue calculations are based on the terms of the previous contract. Sky will show 128 matches live, which increases to 215 next season, TNT will show 52, and Amazon Prime Video will broadcast 20. British fans will be thrilled to have access to 200 out of the 380 matches.
In the 2023-2024 season, the total prize money disseminated by the Premier League was a staggering £2.848 billion. Due to the new contract not being implemented until the summer, the same prize fund will remain in place for the 2024-2025 English season.
The prize money is divided into three parts: domestic, international, and commercial. The domestic portion is derived from British broadcasters, the international from overseas broadcasters, and the commercial from the league's advertisers. Here's a breakdown:
- Domestic: £1.334 billion
- International: £1.351 billion
- Commercial: £164 million
Clubs receive money based on three key indicators: base payments (equal for all), prize money (based on their position in the league table), and payments for the number of matches shown live. Each team receives points totaling six:
- Base payments from the domestic part: £624 million.
- Payments for the number of matches shown (from the domestic part): £354.7 million
- Payments for position in the league table (from the domestic part): £354.7 million
- Base payments from the international part: £1.114 million.
- Payments for position in the league table (from the international part): £237 million
- Base payments from the commercial part: £164 million.
The funds are distributed proportionally based on the conditions met. For instance, the last team in the league earned a meager £2.8 million, while the first earned a substantial £56.4 million. British TV money is also distributed according to a complex principle: all clubs are guaranteed to earn £9.3 million for every 10 TV matches, even if there are fewer broadcasts. Each additional match shown brings approximately £0.837 million.
Using this method, we can easily calculate Liverpool's prize money for winning the championship in the 2023-2024 season.
Liverpool Banking on a £5 Million Increase from the PL
According to our estimates, here's the breakdown of Liverpool's prize money for the domestic championship:
- £31.2 million - equal payments from the domestic part;
- £33.8 million - payments for first place from the domestic part;
- £55.7 million - equal payments from the international part;
- £22.6 million - payments for first place from the international part;
- £8.2 million - PL commercial part.
The remaining amount comes from the British TV. The Premier League releases the schedule of matches selected for broadcast in England each month. Liverpool, as usual, is expected to attract significantly more interest, which should bring the team £25.2 million.
In total, the Premier League should deposit £176.7 million into Liverpool's coffers this summer (or slightly less than €208 million at the current exchange rate). Last year, the team raked in £171 million, while the first-placed Manchester City received £175.9 million.
This is only the centralized payments from the Premier League. Liverpool will most likely receive bonuses from their sponsors, as well as revenue from tickets, merchandise, and various deals. However, these figures will only be available at the end of the year.
But we can still estimate the earnings from other tournaments.
Liverpool Shines Across Tournaments, Earning over €300M
Despite a disappointing run in the 2024-2025 Champions League, where Liverpool was eliminated in the first playoff round by PSG, the team managed to secure a respectable €98.13M from UEFA. This falls short compared to Arsenal, who reached the semifinals and will earn €117.93 million.
The English nation cups are relatively low-paying tournaments, with teams earning significantly more from ticket sales. Liverpool's loss in the League Cup final to Newcastle brought in just £50,000, while the club's early exit from the 2024-2025 FA Cup against Plymouth earned another £115,000.
In total, Liverpool walked away with £260.27M (or €306.26M) in the 2024-2025 season through sporting results. Though this isn't a record for prize money for a 20th championship, the season has still been nothing short of exceptional.
The management is prepared to invest a record transfer budget in the summer to aim for the 21st championship, a feat that would make Liverpool the most decorated club in English history. One year ago, few would have believed that the replacement of Jürgen Klopp with Arne Slot would be such an inspiring decision.
- The upcoming new era for the European football industry will see an influx of finance due to the staggering £6.7 billion TV contract for the Premier League, starting from the 2025-2029 seasons.
- In the sports world, football business in Europe is undergoing a significant shift, with new broadcast deals promising a surge in the number of matches available for viewers.
- As the finance landscape of football in the UK evolves, several business changes are anticipated, such as the increase in the number of matches shown on broadcasters like Sky Sports, TNT Sports, and Amazon Prime Video.
- In the business sector, the 2024-2025 season will see a substantial increase in revenue for clubs participating in the Premier League due to the new TV contract, particularly for teams like Liverpool, which are set to benefit from the enhanced broadcast deals.
