Soccer video and TV booth

Burnley richer than Ajax? Premier League seals record TV deal.

The English Premier League yesterday sealed a record-breaking new TV deal, with Sky and BT Sport agreeing to pay an eye-watering £5.136 billion ($7.83 billion) for live Premier League rights for three seasons, starting in 2016/17. Sky will show 126 live games each season, at an average cost of £10.2m per game, and BT Sport will show 42 live games each season, at the slightly lower average of 7.6m per game.

At first glance this might appear to be great news (after all, it is a 70% increase on the current deal), but it also generates a lot of talking points about subjects such as scheduling of games, ticket prices, grassroots football, the England national team and financial fair play (FFP).

For the first time, this new deal includes a batch of Friday evening fixtures. This could prove to be a hardship for some away fans (for example, if Southampton were to play Newcastle), but could also benefit clubs playing in the Champions League. In other European leagues, it is not uncommon for the FA to rearrange fixtures for those clubs to give them extra time to prepare for a European fixture. From a viewer’s standpoint, the idea of Friday night games is a strange one, but one that will no doubt be happily adopted.

Upon the announcement of the deal, fans and pundits alike called for a cut in ticket prices. For years, the price of tickets has outstripped the rate of inflation, with many fans priced out of the game. But although there are many calls for this new deal to signal a turning point in ticket prices, it’s much more likely that the big winners will be the players and their agents.

Along with ticket prices, the other emotive topic for fans is lower league and grassroots football. Following the announcement of this deal, the Premier League was quick to point out that £168m will be invested in “facilities and good causes”, such as 3G artificial pitches. Even politicians have been calling for more investment in grassroots football, leading Premier League CEO Richard Scudamore to defend the deal. “We’re not set up for charitable purposes. We are set up to be the best football competition.”

It’s a tough one to work out. Football is a business and the Premier League is a brand – a hugely successful one at that. However, there is a feeling that if not enough money is allocated to sustainability of the game at lower levels, the Premier League will become even more distinct and out-of-touch with the rest of the English football pyramid.

Regarding the possible implications for the Three Lions, Lord Sugar, former Chairman of Tottenham and one of the men involved in the first ever Premier League rights TV deals, believes that the influx of money will further encourage clubs to spend big on foreign players instead of giving home-grown youngsters a chance.

When you look at the current squads of the two wealthiest clubs in the league, Chelsea and Manchester City, it’s not hard to see why Lord Sugar is concerned. Of course, the national team isn’t a top priority for the Premier League, although it would be nice if they and the FA tried to work together a little more than they currently do.

Finally, this deal will see English clubs further dominate the financial landscape of European football. Currently, all 20 Premier League clubs feature in the top 40 richest clubs in the world, and this deal could potentially see them all break into the top 30 soon. Which is why a “small” club like Burnley is worth more than a former European powerhouse such as Ajax.
The table above details the money earned from TV deals for each club in Europe’s top five leagues for the 2013/14 season. Amazingly, only five clubs from outside the Premier League earned more than Cardiff, who finished in last place. The Welsh side earned more than Bayern Munich and Borussia Dortmund combined. Once the new deal kicks in, the team finishing last will pocket £99m, with the top teams looking at a total of around £150m. At least the distribution of money in England is quite fair, particularly compared to La Liga where the incomes of the top two dwarf the rest.

All things considered, this a great deal for the Premier League and it may not have even peaked yet, as the expansion into the US and Asian markets continues. And bear in mind that this deal is just for coverage of live matches in the UK. The BBC recently paid £204m to retain rights to show the highlights on Match of the Day, and the worldwide distribution rights are still to be decided. The success story of the Premier League shows no signs of ending any time soon.

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Greg Bortkiewicz