What makes England’s Premier League the most lucrative league in the world?

The London Economic

By Nathan Lee, Financial Analyst 

The Premier League is the most lucrative sporting event in the world, home to the highest grossing teams and wealthiest players. But is it sales on the gate and ancillary pie revenue paying Wayne Rooney’s  £250k a week, or Burmese television rights?

Football grounds are like television audiences in England’s top tier. Any revenue generated from the 50,000 or so dedicated followers is trumped by television money tenfold, which is becoming increasingly global and dangerously lucrative in its nature.

The Premier League’s latest TV rights deal, which covers three years until the end of the 2015/2016 season, is worth £5.5 billion. Sky’s battle with BT, which we documented here, is responsible for more than half of that income stream, with BT Sport paying upwards of £700 million to broadcast 38 games a season. But a huge £2 billion of the Premier League’s TV money comes from overseas sales, which has shifted the focus away from Britain to the rest of the world.

Globalising football

More than 800 million homes worldwide subscribe to channels showing Premier League games — and many more fans watch in public bars. In Sub-Saharan Africa,  domestic games are often rescheduled so they don’t clash with English games, because many fans consider Manchester United, Chelsea or Arsenal as their first team, and their local equivalent as a secondary choice.

Thailand, Singapore and Hong Kong  are the biggest markets and pay the most, but Asian markets hold an overwhelmingly dominate position. A pay-TV company in Burma, a nation where the average worker is paid less than £1,000 a year, recently bid £25 million for the rights to screen Premier League football in the country. Football grounds, when compared to global dominance, seem rather restrictive, and the all competing teams are aware of it.

Manchester United based their pre-season training around a 27-day tour of eight friendly matches played in Thailand, Australia, Japan, Hong Kong, Sweden and Spain. Chelsea played three matches against local teams in Bangkok, Malaysia and Jakarta, followed by four games in the US against big European clubs.  Arsenal went to Indonesia, Vietnam and Japan. Spurs went to Jamaica and Hong Kong.

Local sport, global revenue

Chairmen are frequently criticised for their disconnect with fans and communities. Increasingly global in their nature, they appear for photo opportunities at the various stadia and sport scarves on the occasional matchday outing. But there is arguably a larger disconnect between the club and their community, which is merely perpetuated by the top dog.

Football, at the top tier, is a celebrity-fuelled, globally marketed cash cow. Those entering the turnstiles this week were merely props to a wider international audience, because financing football is not about satisfying an audience of 50,000, but a global viewer base of 800 million.

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