SBD/July 17, 2012/Leagues and Governing Bodies

Scottish Premier League Faces Grim Financial Future As Rangers Dropped To Third Tier

Rangers will drop two tiers in Scottish soccer after financial turmoil
The Scottish Premier League is “scrambling to salvage its financial future after its clubs agreed to accept that the newly formed Rangers club will be starting the forthcoming season in the Scottish Football League Third Division,” according to David Conn of the GUARDIAN. SPL CEO Neil Doncaster and SFL CEO David Longmuir had “warned of potential financial collapse if Rangers were made to join the Third Division,” because the SPL's $125.1M (all figures U.S.) TV deal and its sponsorships “depend on both Celtic and Rangers being in the league.” Central to the SPL finances is “a new TV contract with BSkyB and ESPN, due to begin this season and run for five years until 2017, in which the broadcasters agreed in November to pay [$125.1M] over those five seasons, but have still not actually signed.” SPL sources before Friday's SFL vote said that broadcasters "had intimated they would walk away, or certainly renegotiate their deals, leading to the warning" that $25M a season could be lost. With Rangers' absence “until at least 2015-16 now apparently accepted, the SPL must now conclude its commercial arrangements.” Doncaster said, "We will be working intensively over the coming days and weeks to clarify the position with our commercial partners.” BSkyB, whose deal “was to include showing" th clubs' SPL matches, "declined to comment.” ESPN in a statement said, "We want to have a continued relationship with Scottish football and, naturally, that would need to make sense for Scottish football, for fans and for our business." Conn notes it is “expected that the broadcasters will renegotiate the [$125.1M] which is in the contracts, given the reduced commercial value of the SPL to them, but neither BSkyB nor ESPN are likely to want to be associated with a major financial collapse in Scottish football.” The Clydesdale Bank said that it “will maintain” its $3.13M sponsorship payment despite Rangers' absence. However, next season is “its last of a four-year deal, and the bank announced in November it will not renew after that” (GUARDIAN, 7/17).

UNCERTAINTY REIGNS: In London, Ewing Grahame reports Sky’s withdrawal would represent “a massive PR disaster for both Sky and Doncaster.” But the prospect “remains that the clubs may now not receive” their next payment of $992,774 from the station on Aug. 6, "an outcome which would plunge several of them into severe financial difficulties.” Doncaster “refused to provide any guarantee that Sky will be showing Scottish football next season” (London TELEGRAPH, 7/17).
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