Alongside matchday revenue and commercial revenue, TV revenue is the third source of income, although an increasingly more important one. At this point in time, as per the latest published club accounts, TV revenue represents 39.9% of all Newcastle United’s turnover (Premiership average 50%).
Last season (2013/14) was the first season of new TV deals that saw Premier League clubs generate around £3.4 billion over three seasons from domestic TV deals (BSkyB and BT; up 60% from the previous deal) and over £2.2 billion from overseas TV deals (up 50%). Based on the Premier League’s long-established, central revenue distribution mechanism, TV monies to clubs are now estimated to range between £60m and £95m per year (season); on average an extra £25m per club (Source: Deloitte 2013 annual review of football finance).
The current Premier League TV deal will expire at the end of the 2015/16 season. After that period, a new TV deal come into effect for a new three year period until 2019 for which the domestic value represents a staggering £5.1 billion (70% increase from current deal) over three years for the Live games to be broadcast by Sky and BT (source: BBC) on top of £204m for BBC’s Match of the Day Highlights (source: The Guardian). Negotiations for a new overseas deal are still ongoing and expected to be concluded later this year, but with rumours that giants such as Google and Apple are interested (source: The Chronicle) another massive increase is on the cards from the current £2.2 billion deal. All in all, it would be no surprise to see the average Premier League club rake in around £150m per season from 2016-2017 merely for being in the league.
In 2007, when Mike Ashley took over, Newcastle United earned £61.2m over and above the TV money through its commercial and match day revenues. In 2013 (the last accounts published) these revenue streams had dropped to £51.5m. Despite this, our total turnover had risen (slightly). The development of the different revenue streams is visualised below:
Our non-TV revenue growth percentage in the period since Ashley’s takeover stands at -15.8%, compared to +133.9% for Aston Villa and +78.1% for Sunderland for example (source: nufc-ashlies.blogspot.nl).
Simply put, Ashley has massively increased our dependence on TV revenue and failed to adequately develop other sources of income, to the extent where our massive support and commercial appeal now hardly represents a financial advantage compared to smaller size clubs or clubs with a smaller fan base.