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Broadcasting Revenue: The Golden Goose?

July 4, 2024

Broadcasting Revenue: The Golden Goose? - SBI Barcelona

Global sports media rights market in 2022 has been estimated to be around $54.7bn / €51.4bn. European top tier football, at the epicenter of global football industry, has been able to garner around 15% (€8bn) of the total media rights pie which translates to about 33% of the total European top tier football revenue in 2022

In the previous part of the series, we discussed about the importance, growth and future of broadcasting as a revenue source, which can be read here. In this part, we will delve into the corresponding importance of broadcasting as a source of revenue for the biggest and the second tier clubs

The Big 20

The dependence on revenues from broadcast is seen for the twenty highest revenue generating clubs too. In 2021/22, the aggregated broadcast revenue of these set of twenty clubs was €4.05bn, which is 50% of the total broadcast revenue generated by top tier European football.

In 2022/23, although the value rose to €4.25bn, its volume share of total revenue decreased to 40% primarily due to the increase in matchday and commercial revenues as the pandemic effect wore off and fan attendances increased

Broadcasting Revenue: The Golden Goose? - SBI Barcelona

Interesting thing to note is the inversely proportional nature of broadcast revenue share on total revenue. As the total revenue keeps increasing, the dependence on revenue from broadcast stream decreases. This can be attributed to the global nature of the bigger clubs whose income from commercial stream increases

Broadcasting Revenue: The Golden Goose? - SBI Barcelona

Second Tier Leagues

For the clubs in the second tier leagues, perennially struggling for a sustainable financial system in place, broadcast revenue is as important as it can get

English football has a unique system of parachute payments which sees clubs relegated from the Premier League receive a percentage of the equally shared element of broadcasting rights each Premier League club receives. It can be argued that parachute payments disturb the competitive balance of the Championship.

For 22/23 season, clubs with parachute payments aggregated more broadcast income (£230mn) than what the rest of Championship clubs aggregated cumulatively (£175mn)

The gap in broadcast income between the top and second tier is huge, even with the parachute & solidarity payments in English football included. A glance at the available data for English, German and French football shows the extent of gap

Broadcasting Revenue: The Golden Goose? - SBI Barcelona

Further, inversely proportional nature of dependence on broadcast income versus the total income holds true for the send tier clubs. The data chart for the English Championship league clubs (clubs without parachute payments considered), given below, gives a glimpse of the effect

Broadcasting Revenue: The Golden Goose? - SBI Barcelona

Conclusion

With the exception of Premier League, the broadcast income which is traditionally the largest contributor in clubs’ revenue, is slowly becoming stagnant or decreasing. This is bound to prompt the clubs to seek ways to increase dependence on other revenue streams

While stadium revenues are growing substantially but not every club has the means to create a strong stadium infrastructure therefore it is imperative that the club places its importance to strengthen its marketing strategy leading to a growth in commercial revenue

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