Leeds United will benefit financially from the deal if they remain in the Premier League.
Leeds United will receive a welcome cash boost should they remain in the Premier League following reports of a new multi-million pound deal.
The Guardian reported this week on a new Premier League broadcast contract with ESPN, covering South America and the Caribbean. The American network have agreed to extend their partnership with the English top-flight until 2031 with the new deal believed to be worth around £450million - equivalent to £90m per year.
According to the report, that represents a 25 per cent increase on the Premier League’s previous terms with ESPN, who unlike domestic rights holders are allowed to broadcast Saturday 3pm kick-offs live. Overall, more than £2billion comes in from overseas broadcasters, compared to £1.67billion between Sky Sports and TNT Sports.
Leeds and their top-flight rivals are said to have been informed of the new deal at last Friday’s Premier League shareholders’ meeting. And they will benefit from the increased revenue, much of which is split between clubs.
According to Matchday Finance, around 80 per cent of the income generated from broadcast revenue is handed to clubs, with around two-thirds of that distribution split evenly among the 20 top-flight outfits. It means Leeds could end up banking millions from this contract alone through a combination of the equal share and merit payment based on final league position.
And this kind of income is very useful to Leeds, given it will fall within the remit of money they can actually spend as per the incoming Squad-Cost Rules (SCR). This new financial control system will be in place across the Premier League from this summer, replacing Profitability and Sustainability Rules (PSR).
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SCR essentially limits on-pitch spending - costs including transfer fees, agents fees and player or manager wages - to 85 per cent of a club’s football-related revenue plus profit/loss from player sales. UEFA also impose their own SCR limits which are a little stricter, meaning Premier League clubs competing in Europe can only spend up to 70 per cent of total revenue.
Investment in infrastructure is not included, which is of particular importance to Leeds given their plans to develop and expand Elland Road. Money spent on that project should not affect their ability to sign players.
An increase in revenue will therefore give Leeds more financial headroom with which to spend this summer. Owners 49ers Enterprises are not short of cash or the commitment to spend it, with the only recent issue being their need to adhere to PSR rules, which disadvantaged the club given their two previous years in the Championship.
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