Clubs wrangle over share of Premier League fortune

Premier League club bosses are gathering in London today for what some sources are describing as the most important meeting in the top flight’s history since its creation in 1992.

The summit has been called to vote on Premier League executive chairman Richard Scudamore’s plan to change the way clubs share the proceeds from international broadcasting rights.

Under pressure from the so-called “big six”, Scudamore wants 35% of that income to be distributed as “merit” payments based on league position. This revenue is currently shared equally and last season every club earned just over £39m (€43.9m) from the league’s more than 80 foreign deals.

Arsenal, Chelsea, Liverpool, the two Manchester clubs, and Tottenham believe they deserve more of this income, which is heading towards £1bn (€1.1bn) a year, because of their greater popularity. Based on last year’s figures, Scudamore’s plan would have increased Chelsea’s take as champions — and decreased rock-bottom Sunderland’s — by more than £12m (€13.5m).

Tenders for the next three-year period — 2019 to 2021 — go out later this year but deals for Brazil, China, sub-Saharan Africa and the United States have already been agreed, with the value rising by 1,000% in China.

For the last 25 years, most clubs’ biggest source of revenue have been domestic rights but, with analysts predicting a more modest increase next year than the 70% uplifts Scudamore secured in 2012 and 2015, international rights are where the biggest upside is.

Domestic deals bring in £5.14bn (€5.79bn), with one third shared equally, another third distributed on merit and the final chunk dished out in “facility fees” when a club’s match is televised. Last season, this worked out at £1.9m (€2.1m) a place in the table and £1.2m (€1.35m) per game.

Coupled with even splits of the overseas income and the league’s commercial rights, this meant the Premier League’s shared revenue was distributed on a 1.5 to 1 ratio from top to bottom, a much more equitable split than any of the league’s European rivals.

It is also more equitable than was intended in 1992, as overseas rights were negligible then. The league’s aristocrats want to restore the original 2:1 ratio for shared income and claim they are why rights are so valuable from Bangkok to Boston.

Any change to the status quo needs a two-thirds majority, or 14 of the 20 clubs, and it is understood a middle-class trio of Everton, Leicester, and West Ham have indicated they will vote with the big six.

The other 11, however, appear to be deeply opposed.

They point to the huge advantage the richest clubs already have from their commercial deals and access to European competitions, and say the league’s relative competitiveness is what makes it so popular abroad.

While most declined to comment or said they would not do so until after the meeting, two said they were strongly against any change to how overseas income is split.

This represents a headache for Scudamore, who has run the top flight since 1999, as he believes a united front is essential as the league heads into next year’s rights negotiations.

One possible compromise is for the clubs to lock in this season’s projected revenue split of 1.6:1 and share a smaller portion of the overseas broadcast revenue on merit.

Failure to agree any change will prompt the big six to explore options for selling their own rights and revive talk of a European Super League.

As well as the foreign rights debate, the clubs will also discuss tweaking the amount of money relegated clubs get in parachute payments.

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