As the top tier of England’s football pyramid, the Premier League is serious business for much of the UK population and updates on this sporting space are constant. Fans are constantly checking fixtures, schedules and league boards to stay in the know and support their teams in any upcoming matches. But how do teams in this reputable league make their money? Here’s a glimpse behind the scenes.
The success of the Premier League
Founded in 1992, the Premier League became a recognised body after 22 clubs at the top level of the English Football League (EFL) decided to break away and form their own league. The Premier League sits on top of the EFL Championship, League One and League Two, and then the bottom three tiers are controlled by the EFL.
The Premier League works on a system of promotion and relegation, where the bottom three clubs are relegated to the EFL Championship. Meanwhile, the top four teams at the end of the season are able to play in the UEFA Champions League against teams participating from across Europe.
The success of this league is unrivalled, with viewers from across the world tuning in to watch the games. It’s also regarded as the hardest league in the world, hosting some of the globe’s most reputable clubs like Manchester United, Liverpool FC and more. The total revenue for the 2021-22 season was €5.45 billion. But what factors will have contributed to this sizeable sum?
How does the Premier League make money?
Broadcasting rights: This is a key source of income for football teams and the Premier League owns the TV broadcasting rights for all the games played in it. They sell these rights to the highest bidders – often the likes of Sky Sports, BT Sport and more. 50% of the proceeds from the domestic TV rights results is shared equally among the 20 clubs, while 25% of the proceeds are ‘merit fees’, and this is determined by the clubs’ positions in the league table.
TV deals: Clubs can also earn significant money from TV deals if the games attract a large number of views.
Commercial revenue: Sponsorships and endorsement deals are a huge part of funding football and this is not based on performance in particular games, making it a more stable source of income for some clubs.
Matchday Revenue: This comes from the money generated by the box office sales and includes season tickets. If a venue has a large capacity, this can give a club a significant advantage.
Merchandise: Buying merchandise from a team, such as a home kit is a great way for fans to help keep clubs going.
Competitiveness as a factor
The Premier League is notoriously competitive across sports in general, never mind football. It displays some of the best sporting talents in the world, so understandably, tensions can run high.
Healthy competition helps football to thrive. And there are plenty of ways it can be channelled to help support teams in the Premier League, with factors such as performance and a dedicated fanbase helping to enable a team’s success.
