Commentary

Have TV Revenues Killed the EPL's Big Four?

ESPN writer Tony Evans on Monday made the bold claim that the era of the "Big Four" in the English Premier League is now “dead.” As it turns out, he says, the flood of international investment into English soccer has enhanced competition instead of killing it.

Case in point: with just over a third of the domestic season now behind us, Leicester City -- last season’s 14th-place team -- is alone at the top. Of course, it’s a tight race, with just eight points separating the top 10 teams in the standings. Last year, 16 points separated first and last at the same point in the season.

Just as Leicester is unlikely to win the league this season, the Foxes are equally unlikely to be relegated, too, which Evans notes is especially important this season, thanks to the new bumper domestic and international TV rights packages that the league continues to sell. 

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As the BBC reported in February, British broadcasting giants Sky and BT paid a whopping $7.8 billion for the domestic rights for EPL games next season. International rights are also being sold this year to individual markets, with NBC having already agreed to pay $1 billion for the right to broadcast the EPL in the USA for the next six seasons -- roughly twice what it paid for its first three-season contract, which expires at the end of this season. By the end of the year, ESPN estimated that the league’s total haul for the renegotiated rights could surpass $13 billion this year.

So how does this affect teams? Evans explains: last season, champion Chelsea earned $150 million from domestic TV, while the QPR, the league’s last-place team, earned $98 million. However, this season, Evans says the last-place team would likely pocket $150 million while the first-place team could earn upwards of $227 million. 

In other words, everyone in question will see an astonishing increase in revenues, resulting in bigger transfer fees paid for better players as well as bigger salaries for players and staff. “Forget the notion of a European Super League; England no longer needs it,” Evans says. With that kind of money, the likes of Leicester, Watford and Crystal Palace would be able to outspend just about anyone under the sun -- barring perhaps Real Madrid, Barcelona and Paris St. Germain.

Of course, we’re already starting to see some of this first hand. Five years ago, it would have been unimaginable for someone like Xherdan Shaqiri to be playing for Stoke City,” Evans says,” adding that that “bodes well for the competitiveness of England's top division.”

The secret to the EPL’s success is undoubtedly its structure for the distribution of TV rights sales amongst its clubs: half of TV revenue is split equally, then a quarter is doled out based on a club’s final place in the standings, with another quarter based on a club’s total TV appearances. 

With that in mind, it’s little wonder, then, that so many foreign investors are enticed by the product, despite the massive initial investment it takes just to compete. As EPL CEO Richard Scudamore noted earlier this year, “[Purchasing an English club] a pretty risky investment unless you are purchasing a club that can pretty much guarantee its Premier League status.”

Well, that is only going to get more difficult as revenues rise and more investment pours in.

In any event, as Evans argues, the net result is good for fans and neutrals alike -- gone are the days when only Chelsea or Arsenal could realistically challenge Manchester United for the EPL crown. Instead, foreign investment coupled with the fair distribution of TV revenues has benefitted the league overall. The only question now is: can other leagues compete? 

 

 

 

 

1 comment about "Have TV Revenues Killed the EPL's Big Four?".
  1. :: SilverRey ::, November 24, 2015 at 12:31 p.m.

    This may spell the end of pro/rel for EPL as well. With the drop off from the premier league to the championship becoming a sheer cliff, teams that get relegated will have a huge cash advantage. You will end up with the same teams coming back in again.

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