We reported yesterday that the new deal for the Premier League was estimated to be around £4.4B, and up from the current deal which runs through June 2016 and is £3B. But that was just an estimate and news that the Premier League has sold TV rights to its games for a record £5.136B, which is 71% above the current deal.
That’s just staggering.
Richard Scudamorere – massive deal
Sky paid £4.2B for five of the seven TV packages, and BT paid £960M for the other two packages in the TV rights auction.
The current deal (£3B)runs out at the end of next season, and this new three year deal will start in the 2016-2017 season.
Sky and BT are the same two companies who won the rights to the current Premier League TV deal.
The current deal – at £3B – means that clubs get anywhere between £60M and £100M each May depending (in the main) on where each club finishes in the league table.
Here’s the increase in PL TV rights over the last 23 years as shown by BBC Sport.
And Newcastle’s revenues increased by about £35M in the last financial year to around £129M, based in large part on it being the first year of the current three year deal, which was much higher than the previous one.
In the financial year 2016-2017 Newcastle can therefore reasonably expect the revenue from the PL to increase by around 70% – roughly – so it gives us some estimate of what Newcastle’s revenue could be at the end of June, 2017, after the first year of this new deal.
Assume that the money paid out to clubs rises by about 70% – so that means the 20 clubs would get between £102M and £170M – depending again on where in the table each club finishes.
So assume we finish again in 10th place, and that will be in the middle of that range – so we’ll get around £136M
In our last financial year ending last June 30th, we received about £78M from the Premier League – so that would mean an increase of £58M in revenues for Newcastle – so that would mean our revenues at the end of June 2017 for the previous financial year, would be £187M (£129+£58).
I have to check out the figures here, but the basic assumption is that clubs will get around 70% more in May starting in May 2017, than they are getting from the current deal.
That will make Newcastle one of the richest clubs in the world, and we will likely be a lot higher than the 19th position we are in at the moment in the Deloitte Money League for our last financial year with around 129M in revenues.
That’s because the other European Leagues do not get anything like this kind of money with their TV rights.
That’s shown in this table which we published yesterday, showing the TV rights received in the top five European Leagues over the last financial year with the figures being in euros.
So as long as Newcastle stay in the Premier League we will become a very rich club, and probably one of the 10 or 15 richest clubs in the world – that’s not being too unrealistic.
Note to Mike Ashley – please spend some of this new money to build a top side at Newcastle that can challenge for the top four.
Another thought – with the Newcastle revenues and profits going to look stellar in the next few years, maybe that will entice somebody to come in with an offer Ashley cannot refuse.
Not there’s a thought.
Dr. Ed Harrison is a retired IBM Executive, who was born and bred in Newcastle, and joined IBM in 1970 after completing a PhD in Computing Science at Newcastle University. Ed ended up building and managing a $2B Network Consulting Business with IBM towards the end of his 34 years at the company, and finally retired back in 2004.
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