Beyond the pitch: Money matters of the Premier League
The Premier League is among the most widely followed football competitions around the world, attracting a vast audience.
This immense popularity translates directly into significant financial gains for the league. Revenue streams in the form of broadcasting rights, sponsorship deals, and global viewership contribute hundreds of millions of pounds annually, solidifying the Premier League’s status as one of the most lucrative tournaments in the sporting world.
Here, we take a detailed look at how the money is distributed among Premier League clubs, including the effect on the sides promoted to and relegated from the division.
Criteria for payout to Premier League clubs
The payment made to all PL clubs depends on six components—three fixed and three variable.
The fixed payments are an equal share of domestic broadcasting rights, international broadcasting rights, and a central commercial revenue system.
The variable components, meanwhile, depend on a team’s final position in the league table, the number of times their games are broadcast in the UK (also known as “facility fees”), and their portion of the merit-based revenue from international broadcasting deals. Facility fees are determined by the number of televised games for a particular club in the league.
Based on the 2023/24 numbers, Arsenal, Manchester City, Liverpool, Chelsea, Tottenham Hotspur, and Manchester United earned the most. The facility fee numbers consistently favour the historically big clubs irrespective of their performances in a season due to their larger stadiums and global viewership.
Just to mention one thing here: the league winners aren’t entitled to separate prize money; they’re just paid the highest amount in the variable component, which is based on league standing and merit-based revenue, though another team may earn more in facility fees if more of their games are televised.
In the 2023/24 season, each PL club received £31.2 million from domestic broadcasting, £55.7 million from international broadcasting, and £8.2 million from central commercial deals, amounting to £95.1 million for simply being part of the Premier League.
When Manchester City won the league in 2023/24, they earned £175.9 million across all six revenue streams. In contrast, the team at the bottom—Sheffield United—earned £109.7 million, which shows how much difference league position and broadcasting revenue can make.
Below is the payout to PL clubs based on their position in the 2023/24 season.
Criteria for payout to relegated clubs
Relegation from the Premier League isn’t just detrimental to a club from a sporting perspective, but also from a financial standpoint. The lower a team finish on the table, the lesser the variable component of their payout gets. The clubs that get relegated also suffer losses due to drop in ticket sales, lack of sponsorship, and broadcast deals.
However, to help these clubs counter the financial losses and remain competitive, the Premier League has a system in place called “parachute payments”, which sees the relegated clubs receive a portion of the English top flight’s broadcasting share for up to three seasons.
As per the system, a relegated club receive 55% of the amount that they would have earned from broadcasting rights in the PL in the first season post relegation. In the second season, the amount drops to 45%, and to 20% in the third. The parachute payments are cancelled and redistributed among the remaining PL clubs if the relegated team return to the top flight within three seasons.
In recent years, parachute payments have amounted to £30 million to each relegated club. It is to be noted that the Championship clubs have often complained about these payments, stating that they provide the relegated clubs an unfair advantage, resulting in the same clubs winning promotion again.
Criteria for payout to promoted clubs
Even though the English Championship is one of the most lucrative second-tier competitions in the world, promotion to the top flight remains the primary goal for its teams. The top two sides at the end of the 46-game regular season earn automatic promotion, while the third spot is decided via the playoffs. Teams finishing third to sixth contest two-legged semi-finals, with the winners meeting in a one-off final at Wembley Stadium to clinch the final Premier League spot.
The earnings are a combination of income from the English Football League and a portion that trickles down from the Premier League. This results in £11m earnings for Championship clubs every season, which includes a basic award amount (50%) and solidarity payments (50%) from the Premier League.
We have already mentioned the criteria for the clubs relegated from the Premier League. Since the ones relegated in the past three seasons receive parachute payments, they’re not eligible for the solidarity payments and therefore receive approximately half of the £11m amount from the EFL.
The rest of the income comes from facility fees, which are paid based on the number of times a team’s games are televised. Here too, clubs with larger stadiums, stronger legacies, and bigger fan bases receive more coverage, earning more in facility fees than smaller clubs.
The teams participating in the playoffs earn some additional income, primarily in the form of gate receipts from the extra games. For the final at Wembley, the winning team often offer a share of their gate receipts to the losing team as a gentleman’s agreement.
The gate receipt amount is a meagre one (around £2 million) as compared to the massive amount promoted sides stand to make—between £170 million and £300 million. This is why the Championship playoff final is often dubbed the richest game in football.
Even if the newly promoted sides go straight back down, they have the safety net of parachute payments. However, life isn’t always easy for clubs that come back to the Championship right away, as they still need to make wise decisions in order to remain competitive and avoid further drop to League One—something that famously happened with Sunderland AFC a few years ago.
