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WORKSHEET
TV Income: Making the Premiership fit for millionaires
Since the top flight English football clubs broke away from the Football League and set themselves up in a new league - the Premiership, money has come to dominate the 'beautiful game' like never before.
In the years since its inception, the Premiership has come to be seen as the richest league in the world, with many of the biggest clubs trying to forge identities for themselves as European or global 'brands'.
At the heart of the revolution in game are the TV companies: Sky, ITV, BBC and now the digital broadcasters, have all played their part in fuelling the growth in income enjoyed by our top clubs.
Indeed, the momentum generated by each round of negotiations over TV rights can be seen clearly by the data gathered on how TV money has progressed since the launch of the Premiership.
Premiership TV Revenues 1992 - 2001
| Season | Top Earning Club | Merit Award | Facility Fee | Equal Share | TOTAL |
| 1992 - 93 | Manchester Utd. | 0.81 | 0.85 | 0.75 | 2.41 |
| 1993 - 94 | Manchester Utd. | 0.86 | 1.01 | 0.74 | 2.61 |
| 1994 - 95 | Manchester Utd. | 0.86 | 1.22 | 0.86 | 2.94 |
| 1995 - 96 | Newcastle Utd. | 0.93 | 1.29 | 0.88 | 3.10 |
| 1996 - 97 | Manchester Utd. | 2.11 | 2.25 | 1.93 | 6.29 |
| 1997 - 98 | Arsenal | 3.25 | 3.42 | 3.04 | 9.71 |
| 1998 - 99 | Arsenal | 3.50 | 3.90 | 3.52 | 10.92 |
| 1999 - 00 | Manchester Utd. | 3.95 | 4.13 | 3.65 | 11.73 |
| 2000 - 01 | Manchester Utd. | 6.73 | 7.39 | 6.30 | 20.42 |
As is clear from this data, TV revenues are divided into three 'strands'. Notice that all clubs in the Premiership receive an equal share payment. This is unusual in comparison with other top European football leagues, where larger clubs' earnings tend to accelerate far faster than those of the less fashionable sides. The second strand of revenues is based on league standing and the final source of income is determined by the number of TV appearances made by each club.
So from the data we can see how top clubs are more able to make high profile signings of players at transfer fees far in excess of what would have been unaffordable. Indeed many analysts argue that inflation in the transfer market is fuelled by clubs' rising income from TV.
For more on the arguments relating to this why not have a look at the 'wanna argument' feature on the football industry on the main Biz/ed site?
But whilst we can see that income from all three strands of TV revenue has accelerated since 1992, it is hard to compare the increases over the period. To help us do this we need to use an index.
Using 1992 - 93 as the base year, index each component part of the Premiership TV Revenues and the total of TV income over the period studied.
You should have the skills to be able to perform this task. If not, help is available in the 'Explanation' section of 'Digging'.
Now fill in the gaps in the table of indexed revenue growth that follows:
| Season | Top Earning Club | Merit Award (1992=100) | Facility Fee(1992=100) | Equal Share(1992=100) | TOTAL(1992=100) |
| 1992 - 93 | Manchester Utd. | 100 | 100 | 100 | 100 |
| 1993 - 94 | Manchester Utd. | 106.2 | 118.8 | ? | 108.3 |
| 1994 - 95 | Manchester Utd. | 106.2 | 143.5 | 114.7 | 122 |
| 1995 - 96 | Newcastle Utd. | 114.8 | 151.8 | 117.3 | 128.7 |
| 1996 - 97 | Manchester Utd. | 260.5 | 264.7 | ? | 261 |
| 1997 - 98 | Arsenal | ? | 402.4 | 405.3 | 402.9 |
| 1998 - 99 | Arsenal | 432.1 | 458.8 | 469.3 | 453.1 |
| 1999 - 00 | Manchester Utd. | 487.7 | 485.9 | 486.7 | 486.7 |
| 2000 - 01 | Manchester Utd. | ? | 869.4 | 840 | 847.3 |
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