Significant Boost for Liverpool and FSG as £5bn deal deadline looms closure
Liverpool and FSG will receive a huge financial boost for the first time, as global rights outnumber domestic rights.
Broadcasting rights is one of the most profitable aspects of the economic model for Premier League team owners. Sky TV altered the course of football in 1992, which cashed in an annual income of £304 million over five years.
The £304 million agreement for domestic and international rights had grown to a £10 billion agreement by 2021. During the previous three years, the final bids for overseas rights in the United States and Australia totalled over £9 billion.
Sky Sports, Amazon Prime, and BT Sport have agreed to extend their contracts across 2022/2025 for a total of £5 billion. As per the Mail, foreign rights will be worth more than domestic rights around the world. However, the bidding is yet to end for the US and Australian markets, which will be around £1.1 billion over six years.
This kind of media rights strength will embolden Liverpool owners FSG and their investors. It will give them the kind of long-term cost certainty they seek. It’s a significant boost after rights valuations were expected to be difficult in the aftermath of the pandemic.
How will Liverpool and FSG benefit from through this deal?
Earlier, the Reds financial statements came out for the year ending May 2020. Among other aspects that were hit the most by the coronavirus outbreak was broadcasting rights.
In the past financial year, when Jurgen Klopp’s team won the Champions League, the club earned £260.8 million. This was due to the Reds’ European success, as well as a remunerative Premier League TV deal both at home and abroad. The club topped the charts for television revenue for the previous three seasons, bringing in £220.1 million the previous season.
The Reds topped the list with £174.6 million in revenue for the 2019/20 season. The figure was around £35 million in equal shares for all clubs, £31 million in payments for each time the club appeared on television (facility fees). A £35.5 million in merit payments based on league position, £5 million in commercial revenues shared equally among the 20 clubs, and £71.3 million in overseas payments, with the figure on a sliding scale with the Premier League’s bottom side receiving £44.6 million.
It emphasized the significance of Liverpool’s success on the field and qualification for the Champions League. FSG must invest in order to continue their Premier League deals domestically and internationally over a longer period of time. It may embolden them to do so at a higher level than seen in the previous two seasons. Thus, this might also be helpfully in upgrading their wage bill and transfer budget.
