Can Tigers earn the £120 million promotion prize?
26 April 2013
Hull City can expect a revenue boost of at least £120 million if they march on to automatic promotion this weekend, according to Deloitte, the business advisory firm. Victory against Barnsley, or defeat for Watford at Leicester City, will see the Tigers secure automatic promotion to the Premier League after a three year absence.
Adam Bull, Senior Consultant in the Sports Business Group at Deloitte, commented: “In a week which has seen the Premier League title decided and four of the biggest teams in the world compete in the UEFA Champions League semi-finals, the most lucrative 90 minutes of football could well be played in the East Midlands or South Yorkshire this weekend.
“The three Championship clubs which are promoted this season can expect a revenue increase of more than £60m in 2013/14. The vast majority of this uplift, approximately £55m, will be from broadcast income as the Premier League enters the first year of its greatly enhanced three year TV deals. Based on existing distribution methods, even if a club is relegated after one season in the Premier League, it will be entitled to parachute payments over the following four seasons of around £60m.
“The newly promoted clubs are often the bookies’ favourites to be relegated, but over the past decade more than half (17 out of 30) of those promoted clubs have successfully retained their Premier League status in that crucial first season. History shows it can be done.”
Over the past decade the value of promotion to the top flight has increased three-fold. This is largely due to the increase in broadcast income and greater parachute payments, both in terms of value and length.
Bull added: “The continued increase in the value of promotion to the Premier League provides newly promoted clubs the opportunity to make strategic investment on and off the pitch. Inevitably, the short term priority is usually investment in the playing side of the business, but clubs need to also look to the medium and long term.”
Note to editors:
About the Sports Business Group at Deloitte
Over the last 20 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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