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SBD Global/November 19, 2013/Media

Italian Football Clubs Pick Infront To Negotiate TV Rights Amid Turbulent Climate

Italy's top-flight football clubs have picked Infront "as the main adviser to negotiate a new package of television rights" for the coming three-to-six seasons, according to Masoni & Mackenzie of REUTERS. The league, "which rejected a rival offer" from IMG, will now "hammer out the final details with Infront before signing a final deal," which would run from the '15-16 season. Infront had guaranteed a minimum of €900M ($1.2B) a year to the clubs for the next three seasons and another €930M ($1.3B) for the three seasons after that in a six-year deal worth €5.5B ($7.4B). However, the offer covering the second period "may be revised during the course of negotiations" which will be led by Juventus Chair Andrea Agnelli and Lazio Chair Claudio Lotito. Infront's proposal had the backing of Italy's largest TV broadcaster, Mediaset, and a group of 13 clubs led by AC Milan. But it "faced opposition from other clubs including Juventus and News Corp.'s Italian unit Sky Italia" (REUTERS, 11/18).

TOUGH TIMES: REUTERS' Masoni & Mackenzie also wrote the deal was "coloured by the unhappy knowledge that Italian football is in a dismal state and viewers are switching off." A "farcical match" in the third division this month, which saw a local derby near Naples abandoned after players were threatened by fans and faked injury to avoid playing, "underlined the grim climate in the Italian game, beset for years by match-fixing scandals and stadium violence." More seriously, from the broadcasters' point of view, the game's top level "has fallen sharply since the glory days of the 1990s." Italy's deep recession "has hit spending on luxuries like television football subscriptions hard," but broadcasters have also "been worried by a slide in matchday attendances and the now standard backdrop of empty seats in half-filled stadiums." Mediaset CFO Marco Giordani said, "The reality in Italy is that pay-TV is losing subscribers. Consumer spending is declining, disposable income is declining, the UEFA ranking of the Italian team is declining, the number of teams participating in the European competition is declining, top players are leaving Italy.'' It is "in this downbeat climate" that the clubs are preparing to appoint an agent to negotiate next year with the TV companies for a new deal for the rights to broadcast matches. Sky Italia "has long been unhappy with a status quo." It has "pushed hard for a re-negotiation of the contract, which, uniquely in Europe, awards television rights on the basis of delivery platform but which charges widely different prices to the two main broadcasters." Sky pays €561M ($758M) for 380 matches a year while Mediaset pays only €268M ($362M) for 324 matches. Sky Italia VP Jacques Raynaud wrote in a letter to the Corriere della Sera newspaper earlier this year, ''It is a discriminatory model which is not fair, just or sustainable.'' Without the roughly €1B ($1.4B) in TV income, the clubs, which racked up combined operating losses of €160M in the '11-12 season, "would be unable to keep going." But without the 4.4 million subscribers to matches, Sky and Mediaset "would also struggle to keep their operations going" (REUTERS, 11/18).
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