BREAKING: the Premier League is filthy stinking rich on the back of foreign TV markets:
The Premier League is unwilling to be drawn on how much it may raise, but informed estimates suggest the overall income from TV rights deals will break the £5bn barrier for the first time. Such a result would ensure that, for all the speculation to the contrary, the small team of Premier League executives and their advisers have continued to achieve recession-busting growth. But it will also present a series of immediate opportunities and challenges for the clubs that will share in the latest bonanza.
It is no coincidence that at Thursday’s meeting, Premier League clubs will also discuss the latest proposals to introduce new cost control measures to try to curb rampant wage inflation. Amid rejoicing at the billions that Scudamore and his team continue to deliver, there is an attendant anxiety they will not be strong enough individually to reverse the “prune juice economics” that have characterised the Premier League era.
This would normally be the point where we would point to Financial Fair Play and make rosy predictions about the redistributive wonderland the Premier League will become with the heady mix of high revenue and restrained transfer spending, which will ensure clubs are flush for years and years to come.
Except the prospect of a few rules-skirting commercial sponsorships, as with Chelsea’s partnership with Abramovich-friendly Gazprom—rendering the entire exercise moot. Big clubs will have more money to spend, and smaller clubs will work to catch-up by spending near, at, or above their turnover. The prune juice effect remains. As any business person will tell you, it’s all about the margins.
More than that, the Guardian speaks of the Premier League’s “the increasing sophistication of the Premier League’s strategy as it attempts to maximise revenue and reach an ever more complex, multi-layered race for global supremacy with La Liga.” Well, I call bullshit.
For one, it’s hard to know exactly what Richard Scudamore has done that’s “sophisticated”; his role in the rights department boils down to taking the largest bag of cash in each market from the highest bidder. Most commercial work in growing the league overseas, particularly in America, is done by the teams themselves through tours and the like, and the regional networks in whose interest it is to grow the product to get ratings and justify the insanely high cost in acquiring broadcast rights. The Premier League is, in effect, a middleman (I prefer bag man).
The league could have drawn a plan to takeover digital broadcast rights, which may have offset individual rights deals but also provided direct, international subscription fees for a single, across the board app, much as MLB has done with At Bat.
But that would require some sort of inventiveness. Instead, fans who would have preferred the single source option are left with a myriad number of subscription deals through networks, even as rights pass from network to network each year. Meanwhile, illegal streams still threaten the value of domestic rights deals as networks fail to convince cable subscribers to pony up for ever-increasing channel packages.
So spare me the “sophistication” angle. The man is there to take the money and run.