How the Premier League's record TV deal will impact football in England
The new Premier League season gets underway on Aug. 13, and England's top football competition has made history without a ball even being kicked.
The most lucrative television deal in world professional football will generate a combined £10.4 billion, which will be distributed among all 20 Premier League clubs. It consists of £5.3bn for the broadcast of live matches by Sky and BT and ancillary deals, plus another £5.1bn from the sale of overseas rights. The deal will run for three years until the end of the 2018-19 season and will make England's leading clubs even wealthier.
Here we take a look at the impact the money could have on five key areas of the game.
For those in demand, the new television money is good news. Transfer fees have been soaring this summer, and with that comes bumper wages for new signings. Last year's record-breaking total summer transfer spend of £822.5 million is expected to be surpassed by this season's £1bn.
According to the latest Deloitte Annual Review of Football Finance, which covers the 2014-15 season, Premier League clubs' wage costs increased by seven percent to exceed £2bn for the first time -- more than the total spent by Bundesliga and La Liga clubs combined -- and wages are likely to increase over the next three years. Clubs do not traditionally reveal the salaries of players, but figures show that they already spend around 70 percent of their overall income on them.
Gordon Taylor of the Professional Footballers Association said that while some of his members will receive bigger pay packets, the television money is an opportunity to help those coming through the ranks. "If the extra funds are used in the right way, it could also lead to more investment in academies, youth football and talent identification," he said. "Clubs have to make sure that it's not just those players at the top who benefit."
Owners will be licking their lips as they brace themselves for what will be an even more profitable period the next three years. The Premier League is already the world's richest football competition. The 20 clubs generated revenue of £3.3bn in 2014-15, with 17 of them recording an operating profit (of which 14 recorded a pre-tax profit.)
According to Deloitte, revenue will grow by more than 20 percent in the forthcoming season, to more than £4.3bn, with the bulk of it down to new TV money. The result is that Premier League clubs will become even more attractive to investors, particularly foreign ones who not only want the prestige of being associated with a leading English football team but also like to turn a profit.
Football finance expert Dr. Dan Plumley of Sheffield Hallam University told ESPN FC: "Premier League clubs are already being run along more professional lines, and this is reflected in their figures. Investors who have a long-term strategy to develop them as businesses will be even keener to own them.
"There are many more opportunities now to make money from a Premier League football club, and this is a direct result of the large television deal."
The complaint in the past has been that despite the Premier League's riches, it's the fans who pay the price through extra ticket and other costs, which makes attending matches an expensive pastime. Not now, however. For the forthcoming season, the majority of clubs have frozen or reduced season-ticket prices. West Ham United, who will play at the Olympic Stadium, lead the way; they have cut theirs, with the cheapest going from £617.50 to £289.
Premier League clubs have also agreed to cap ticket prices for away fans at £30 for the next three seasons. Arsenal decided to introduce a further subsidy and price tickets for visiting supporters and its own fans traveling to away games at £26. Clubs are also using some of their television money to redevelop existing grounds or build new ones (Tottenham, Chelsea, Liverpool, Manchester City, Stoke City), which means bigger capacities and better facilities for fans.
For armchair supporters, however, the future might not be so rosy. The huge amounts paid by media companies for live coverage mean they might pass on some of the cost to viewers, resulting in more expensive monthly subscriptions.
According to the latest figures published by the FA, Premier League clubs paid a staggering £46.5m in agents' fees from October 2015 to February 2016. With more than ever set to be spent on players this summer, you could be forgiven for thinking that it's rich pickings for those who represent them. The answer is more complicated than that.
Barry Silkman, one of Britain's leading football agents, claims the forthcoming flood of television money has led to an over-inflated market that makes it more difficult to arrange transfers. He said footballers who would ordinarily have fetched a fee of £10m are now being sold for £20-30m. In one deal that recently fell through, a player who was earning £30,000-per-week demanded £100,000-per-week from the Premier League club that wanted to buy him.
"Everybody is playing hard ball because they know there's more money circulating," he told ESPN FC. "Clubs are asking for ridiculously high amounts for average players, while the players are asking for ridiculously high salaries."
Silkman also revealed that at this time last year, he had concluded three deals with Premier League clubs. This summer, he has yet to do one, but for those whose players are being signed, it's a case of win, win, win.
"It's fantastic news for them," he added. "But the money is escalating so much because of the television deal that somewhere along the line, the bubble has to burst. Football needs to come back to reality."
One of the criticisms leveled against the Premier League has been that while it has flourished, the lowest reaches of the game have floundered. Soon after details of the television deal were released, the 20 clubs met to announce that they would invest "at least £1bn" (£50m per club) in grassroots facilities and programs. The details of how and where it will be spent are still being discussed.
The Premier League also decided to join forces with the Government and the FA to build more state-of-the-art 3G pitches in 30 cities across Britain. Sports minister Tracey Crouch, who has publicly called on the Premier League to do more to help the grassroots of the game, claimed that only one-third of the promised £1bn "will go to the real grassroots."
Those at the sharp end of English football are just as skeptical. Channa Singh, who manages an amateur football team in west London, told ESPN FC: "If you combine what the Premier League earns from domestic and overseas television deals and commercial income, then what it's offering is not very much.
"Grassroots football will only benefit up to a point from the new television money, and it's a pity that some of the world's richest clubs are not doing enough for a very neglected part of the game."
Vivek Chaudhary covers FIFA and the financial side of the game for ESPN FC. Twitter: @viveksport