Royals and Terriers battle for biggest financial prize in football has been saved
Royals and Terriers battle for biggest financial prize in football
25 May 2017
- The winner of Huddersfield Town versus Reading in the Football League Championship Play-Off final will secure the final promotion spot to play in the Premier League next season;
- If promoted, Huddersfield or Reading will benefit from future additional revenue of at least £170m across the next three seasons;
- This figure could rise to in excess of £290m if the club survives their first season in the Premier League.
On Monday 29th May, Huddersfield Town and Reading will battle it out for what is considered the most valuable match in world football. Promotion to the Premier League for either club will see an uplift in revenue of at least £170m, rising to more than £290m if they survive their first season in the Premier League.
Dan Jones, partner and head of the Sports Business Group at Deloitte, commented: “Wembley’s winner-takes-all clash will be a fantastic advert for both the Premier League and the Championship. We are one year into the new broadcast rights arrangements and fans of these clubs will be fully aware of the financial reward for playing in the top flight next season.”
The winner of the Football League Championship Play-Off final, along with already promoted Brighton & Hove Albion, can expect a revenue increase of at least £170m across the next three seasons. This is a combination of extra revenue they will earn from playing in the Premier League in 2017/18 (at least an extra £95m, mostly from central distributions) and parachute payments in 2018/19 and 2019/20 should they be relegated after one season (totalling at least c. £75m across the two seasons*).
Reading or Huddersfield, and Brighton, could see this figure rise to at least £290m if either club survives its first season in the Premier League. Over the past 10 seasons to 2016/17, 18 (60%) of the 30 promoted clubs have avoided relegation in their first season in the Premier League.
Jones added: “The financial prize for Reading or Huddersfield, and Brighton, becomes at least £290m if the promoted club survives the first season in the Premier League. Burnley successfully stayed up this year, and a sustained period of Premier League participation could provide any newly promoted club with the platform to enter the top 30 of the Deloitte Football Money League.”
Newcastle United, who were in receipt of parachute payments in 2016/17, will benefit from a minimum uplift in central distributions of £60m in 2017/18. The higher up the Premier League the club finishes in 2017/18, the higher their revenue will be (c. £2m per finishing position). Even if Newcastle are relegated at the end of their first season, the minimum uplift in revenue over the next three seasons will be £120m.
Jones concludes: “The current broadcast rights arrangements provide Premier League clubs with the financial resources to make strategic investments both on and off the pitch. Whilst this typically includes some increased expenditure on playing talent in the short term, it is important that promoted clubs are committed to long-term financial responsibility. Recent history has shown that parachute payments are no guarantee of promotion back to the Premier League if relegation does occur.”
*This assumes that the next cycle of Premier League broadcast rights, due to commence at the start of the 2019/20 season, deliver at least the same value as the current rights cycle.
Notes to editors
Finishing position for clubs in the first season following promotion to the Premier League
|Season of promotion||Championship Winners||Championship Runners-Up||Play-Off Winners|
|2006/07||Sunderland – 15th||Birmingham City – 19th||Derby County – 20th|
|2007/08||West Bromwich Albion – 20th||Stoke City – 12th||Hull City – 17th|
|2008/09||Wolverhampton Wanderers – 15th||Birmingham City – 9th||Burnley – 18th|
|2009/10||Newcastle United – 12th||West Bromwich Albion – 11th||Blackpool – 19th|
|2010/11||Queens Park Rangers – 17th||Norwich City – 12th||Swansea City – 11th|
|2011/12||Reading – 19th||Southampton – 14th||West Ham United – 10th|
|2012/13||Cardiff City – 20th||Hull City – 16th||Crystal Palace – 11th|
|2013/14||Leicester City – 14th||Burnley – 19th||Queens Park Rangers – 20th|
|2014/15||Bournemouth – 16th||Watford – 13th||Norwich City – 19th|
|2015/16||Burnley – 16th||Middlesbrough – 19th||Hull City – 18th|
Note: Clubs in bold avoided relegation in their first season following promotion to the Premier League.
About the Sports Business Group at Deloitte
Over the last 25 years Deloitte has developed a unique focus on the business of sport. Our specialist Sports Business Group offers a multi-disciplined expert service with dedicated people and skills capable of adding significant value to the business of sport. Whether it is benchmarking or strategic business reviews, operational turnarounds, revenue enhancement strategies or stadium/venue development plans, business planning, market and demand analysis, acquisitions, due diligence, expert witness, audits or tax planning; we have worked with more clubs, leagues, governing bodies, stadia developers, event organisers, commercial partners, financiers and investors than any other adviser.
For further information on our services you can access our website at www.deloitte.co.uk/sportsbusinessgroup
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