Explain the business model of the English premier league. Critically assess how the premier league might develop this model going forward in the light of the project big picture proposal of October 2020
All 20 clubs are independent and work under Pyramid based of FA, EUFA and FIFA, as well as follow English and European law, however after BREXIT the European law had subjected to change.
The English Premier league has a few stream of incomes such as commercial revenues from sponsorship and merchandise sales, which is naturally shared equally amongst the clubs depends on the club pupillarity. However the most important part of income its broadcasting.
Broadcasting is the one of the major an impressive business model which clubs revenue come from.
Big tech companies by put bidding procedure to become the exclusive rights holder of the games and eventually charge their audience access fees and ad placement fees to advertisers. For instance BT sport, Sky Sport and this year Amazon Prime has participated to show 16 games.
The 50 % of income from broadcasting are shared equally among the 20 clubs. 25% of the proceeds are distributed to the so-called merit fee, which is decided by the club ranking in the league at the end of the season.
The remaining 25 percent is assigned to facility rates, which vary based on how much the games are shown on TV. As far as international television rights are concerned, all sales are divided equally, but as of the 2019/2020 season, any raise will be allocated to teams on the basis of their place in the league table.
Project Big Picture’ concept has brought up from Liverpool and supported by Manchester United, which says 9 big clubs have right to vote to major change and therefore more broadcasting revenue comes to 18 teams.
The plans entail a number of significant improvements, including the decrease of the number of Premier League clubs from 20 to 18, as well as the removal of the League Cup and the Community Shield.
The reform proposals have been endorsed by the EFL, primarily because it is planned to fork over 25% of all profits from the four divisions directly to the Football League, as well as offering a much-needed loan of GBP 250 million.
It implies the understanding of the primary source of Project Big Picture, top 6 clubs enjoys most benefit of this event , however by sharing some money to other teams, the rest will use benefit of this new structurer for football.
Project Big Picture is a fresh dawn that will reinvigorate the football pyramid at all stages. This new beginning will re-energize clubs in the lower divisions.
Although there are positives to the suggested reforms, the measures will entail controversially granting the main players in the Premier League more leverage to control big decisions, including arrangements allowing the nine longest serving parties to take on a ‘long-term shareholder role.’
This will entail being able to make choices and improvements with the help of (somewhat suspiciously) six of the nine teams, all of which fear that this is the beginning of the conventional ‘big six’ league, having full charge of the division and possibly the first move to promote the European Super League.
In the light of the project big picture proposal of October, the broadcasting revenue will massively increase for English team as we know more people are willing to watch 6 tops team, therefore the 6 big clubs will use more benefit from advertising, improving contract with current and future sponsors and ticket revenue. However the down side \of this increase my occur more bargaining power through agents and players. Premier League teams will have the sole right to market eight live games exclusively to fans outside the UK on their own digital channels.
The proposals laid out how the nine longest-serving clubs will have a larger impact on a number of governance issues, including television arrangements, cost management mechanisms such as Financial Fair Play and even ownership of other clubs. The big six will both profit the most from plans to market eight matches each season directly to foreign audiences, and from a reduction in the new calendar to enable this to happen.
Reducing the number of Premier League clubs and abolishing the EFL Cup will create room for more Champions League games, and no club is ever able to give up games that make money, which is why the Premier League has never been trimmed to less than 20 teams. A changed voting system would make it possible for the wealthy to alter the structure.
The benefit of the game – the fact that the best football is played between the two teams with an essentially equal capacity, the right of every individual somewhere in the world to have their own team that could in any way be successful – will be sacrificed. The only realistic endpoint will be a super league with a tiny handful of European super clubs.