England’s richest football clubs have won a battle over their domestic rivals to receive a greater share of the £3bn the Premier League receives from overseas television broadcasting deals.
Since the Premier League’s founding 25 years ago, revenues from international broadcast contracts have been split evenly across each of its 20 clubs. As the value of Premier League deals boomed, the wealth was spread across the teams, helping to make it one of the most competitive leagues in Europe.
On Thursday, the owners of the 20 Premier League clubs agreed to change the model, accepting a demand from the wealthiest six teams — Manchester United, Manchester City, Chelsea, Liverpool, Arsenal and Tottenham Hotspur — that overseas money should be distributed on “merit” or performance in the division instead.
The Premier League said that from the 2019/20 season, a new formula had been agreed to share future international broadcast revenues, according to where a team finishes in the league.
When domestic TV rights are also taken into account, the top team receives around 1.6 times the amount as the bottom team from all broadcasting revenues.
That will change from next season, so that: “The new formula for sharing any future increase in international revenues caps the ratio at 1.8:1.
“This means the maximum a club can receive in total central revenue payments is 1.8 times the amount received by the lowest-earning club.
“Should future revenues rise to the point where the cap is reached, any additional income will be distributed so the 1.8:1 ratio is maintained.”
Premier League Executive Chairman Richard Scudamore said: “When the Premier League was formed in 1992 nobody could have envisaged the scale of international growth in the competition which exists now.
“Back then the clubs put in place a revenue sharing system that was right for the time and has served the League well, enabling them to invest and improve in all areas.
“This new agreement will continue that trend with a subtle change that further incentivises on-pitch achievement and maintains the Premier League’s position as the most equitable in Europe in terms of sharing central revenues.
“By coming together and agreeing this change, the clubs have provided a platform for the future success of the League for many years ahead.”
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