WSC 157 Mar 00

If you think the Premier League’s new television deal will be different when it is unveiled sometime this year, wait until the next one. The shape of the soon-to-be-negotiated contract will represent a big step forward from the present one, but the contract after that will reflect something altogether more interesting – a rev­olution, not just in the way football games are sold by clubs and acquired by media companies, but also in the way they are paid for and watched by fans.

Since the start of the year the new chief executive of the Premier League, Richard Scudamore, has been visiting the 20 clubs to consult them about how their television and other media rights should be packaged and sold. As a result of that process, unlike the last two occasions, the rights to Premiership games will not be sold as a simple live/highlights package this time.

There will almost certainly be some “unbundling” of the rights, so that more broadcasters will get the chance to show some Premier League football. For ex­ample, ITV could get the Sunday afternoon live game, just as it used to a decade or so ago, with Sky keeping the Monday night game and the BBC retaining the highlights for Match Of The Day. Also, pay-per-view rights could be sold separately, maybe to a digital broad­­caster who would pay a flat fee for them and then share the revenues with the clubs.

The unbundling could go further, depending on how much the Premier League is prepared to risk losing the financial premium that goes with selling football rights on an exclusive basis. The big clubs with their own television channels or services are keen to gain control over delayed highlights so that, for ex­ample, Man­chester United could show extended coverage of a Sunday afternoon Sky game to its sub­scribers on MUTV on Monday evening.

The one thing that will be definitely the same as the last deal will be the broad commitment to collective selling. Almost all of the media rights will be sold on behalf of 20 clubs, that way ensuring the revenues gen­erated can be distributed roughly equally.

It is the principle of collectivity that will be most under pressure the next time the Premier League neg­otiates its media contract(s). Given that the deal which will be signed this year will definitely be shorter than the last one, maybe for three, or even two, years, it is likely that the question of whether clubs should be giv­en a bigger individual say in the selling of their rights will crop up again around 2003.

By then, the much discussed “convergence” of media technologies – meaning broadcasters will be able to deliver both traditional programming and interactive internet content to people’s computers and televisions – will be a reality in Britain and many other countries.

With this capability, the horizons for the Premier League clubs will expand hugely. Instead of thinking of providing, say, 60 live games a year to a limited UK pay-TV market, the rest on a pay-per-view basis to a similarly limited domestic audience, plus a modest highlights programme to the 100-plus countries that enjoy watching English football, the clubs will be able to deliver their games to anyone with a modern tele­phone connection anywhere in the world at any time of the day or night, and charge a fee for it.

However, with the potential to reach such a huge audience and levy direct charges for access to Premiership football, the clubs will then have to address a vitally important question: do they continue to share the rev­enues from the sale of their games on a broadly equit­able basis? This is why the next Premier League media deal but one has the potential to spark a revolution in English football. By 2003 the pressure on the biggest clubs to ensure the financial rewards they earn from broadcast rights reflect as closely as possible their stat­us within the domestic game will be greater than ever. Why? Because by then the big continental clubs will be reaping huge dividends from their own revolutionary television deals.

In 2003, for example, Barcelona will start earning £50 million annually from the television deal they signed on their own last year with a Spanish cable group. At the moment, the English champions earn roughly £10 million a year from the Premier League contract, and will probably earn double that from the new one, which means in two or three years’ time they will still be earning half as much as Barcelona. The gap is likely to be as large if not larger in Italy, where the big clubs are already benefiting to the tune of tens of millions of pounds a year from their breakaway deals.

Given that the top Premiership clubs already prefer to measure them­selves against the continent’s, rather than Eng­­land’s, best, that they now compete in a worldwide market for top-quality foot­ball labour, and that by 2003-04 Euro­pean competitions are likely to be even bigger and more important than they are now, clubs such as Manchester United, Arsenal, Liverpool, Chelsea, New­­­castle, Leeds and Villa will not be prepared to sit by and watch their European rivals disappearing into the distance. So enjoy the collective nature of this new television deal while you can, because it will probably be the last one. In three or four years’ time, it could be every club for itself. 

From WSC 157 March 2000. What was happening this month

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