By Tony Attwood
Working out how much each club earned from various sources is a difficult task, because clubs only reveal what they have to reveal – and then they do it as late as they can, in most cases.
But fortunately there are financial laws which require limited companies to make public declarations, and the Premier League do reveal how much they paid to various clubs each season for TV rights.
In what follows some of the figures don’t seem to look and feel right – but then the clubs don’t have to tell us exactly where each bit of money comes from, and they can put different income in different pots.
But my point here goes beyond this – I want to see where clubs can expand their income. So it is not so much how much money each club has now. But how much might it have in the future.
First, the background.
The Premier League gets its money from Sky and BT, plus a much smaller amount from the BBC. The total is over £3bn. Then there is £2bn overseas money over 3 years which is divided up equally between the clubs.
Additionally there is prize money (also known as merit money) which is dependant on the position the club finish in the league which is around £1.2m for every place a club finishes in the league.
Of the UK TV money 50% is divided equally between the clubs, and then 25% to each club according to where they finish, and 25% is given according to how many times the club is shown.
What you can see from this is the fact that while Man City fans against the FFP regs have been saying that the FFP regs just keep the big earners at the top of the league, this reward for excellence is exactly the same in the Premier League. The more you are shown, the higher your place, the more money you get.
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Then we have FA Cup money. In each round the clubs get money. So to take the last couple of rounds Arsenal got £900,000 prize money for winning the semi final and £1.8m prize money for winning the final. And of course they got money for getting through each earlier round.
TV money is less – the winner might get £1m TV money in addition to the above – obviously the earlier you go out, the less prize and TV money you get.
In the Champions League every team gets money – just for being in the play off round you get €2.1m, while in the group stage each team gets €8.6m. Additionally clubs get €1m for winning a game and €500,000 for a every draw in the group stages. It gets higher in the later rounds.
Thus European TV and prize money means that coming in the top four of the PL is always better than winning the FA Cup or League Cup in terms of being able to buy players. It is not a trophy, it is the way to pay for players, a new stadium or anything else you fancy.
Now I getting to my point. European money is the result of coming in the top four and is utterly key to future development. It is variable and dependent on the club’s results. Top four gives you the money via Europe.
But other sources of income are not so much under club control. The amount of gate money taken for matches is pretty much stuck, because most grounds are full and fully exploited. Yes, win the FA Cup and you pick up some more gate money, but in the scheme of things, it is not that much.
On the other hand, although merchandising has a limit somewhere, for most clubs it can be extended with ever better as the club’s worldwide image expands. So we begin to see the route to financial success – get a big ground, and then do the merchandising – while all the time try to stay in the top four. And guess what, that is exactly what Arsenal has done.
Let’s try this with numbers…
Premier League payments to clubs for this season just finished we find…
- 1 Liverpool £97,544,336
- 2 Man City £96,578,329
- 3 Chelsea £94,106,163
- 4 Arsenal £92,870,080
- 5 Tottenham £89,663,884
- 6 Manchester United £89,161,831
- 7 Everton £85,027,727
The difference from top to bottom is not massive. OK it is £12m, but in the context of things, that is not huge. (And remember, overseas TV money is shared equally; it doesn’t matter how much you are shown, you still get your equal share of the £2bn).
So go up the league and popularity stakes a bit, get shown on TV a bit more and the Premier League pays you a bit more – but the difference of going up from 4th to 1st does not earn you much money. Exactly the same as with the FA Cup. Yes there is more money but not a huge amount.
But now look at gate and match day receipts per club per year.
- Liverpool £42m
- Man City £22m
- Chelsea £78m
- Arsenal £95m
- Tottenham £75m
- Manchester United £99m
- Everton: £17m
These can’t go up much, because building a stadium takes time – which is why clubs like Everton, Liverpool, Chelsea and Tottenham are so desperate to buy a new ground each. (Incidentally, the Tottenham figure looks suspiciously high to me, but that’s what they say in their accounts, and they do have the highest gate prices in the world).
Incidentally these figures are a year old, so the next lot will see Arsenal rising because of this season’s FA Cup.
Finally commercial activities
- Liverpool: £64m
- Man City: £121m
- Chelsea: £70m
- Arsenal £52m
- Tottenham £18m
- Manchester United £118m
- Everton £11m
Now this begins to paint an interesting picture, because here we see only the second area where the club can do a lot to affect its own position. Commercial activities range from selling copies of my books in the Arsenal shops (not enough to keep me in luxury sadly) through to doing deals with shirt sponsors and stadium namers.
Arsenal’s figures are lower than they might have been because only now are we negotiating new sponsorship contracts after the flurry of getting money to pay for the stadium when it was built. Arsenal’s new deals are much more valuable than those signed last time around, because the stadium is there, established, and working.
This is the area where Arsenal have space to earn more. But what of the other clubs? Everton, as we can see, are stuck, unless and until they can build and fill a new stadium. But even then they will have years of going through what Arsenal did after building the Ems – paying for it. Yes the stadium is necessary, but no it doesn’t solve all your problems on day one – unless you have an oil state as an owner.
I also think Tottenham’s figure is low here – and that some of the match day money should be in this pot, but you get the idea.
Man U’s worldwide marketing is legendary, but is now overtaken by Man City because of the huge sums the owners of the club can pay themselves for things like naming rights, and expertise rights which are sold between the companies they own (which is where FFP tripped them up). Trading with yourself is ok, but it is not like selling stuff to outsiders.
Liverpool are showing more income from commercial activity than Arsenal, with Liverpool trading on their past Euro glories, as of course they should. But they have milked that as far as it can go, and there is no way they are going to expand their marketing money without winning a whole string of trophies and building a new stadium – and even then, they won’t have the money for seven years because they will be paying for the stadium.
So this is my point. We see the numbers from the past but have to look to the future as well. The question is always, what bit can you expand and how quickly. And this is where some clubs get very stuck. Indeed I would say that it is now harder for Man U to expand its marketing deals because it has been at the top of the market for so long. Arsenal however are still climbing.
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