English football’s top clubs "are richer to the tune of an astonishing" £5.1B ($7.8B) after the Premier League agreed a record new domestic TV deal, according to Matt Dickinson of the LONDON TIMES. The figure represents a 70.2% increase of more than £2B ($3B) on the existing three-year agreement, "matching even the highest expectations of a boom." With seven packages on the table, Sky "maintained its dominance by securing five including the key spots of Sunday afternoon and the possibility of ten games in a new Friday night slot for the new deal" which runs from '16-19, at the cost of £1.4B ($2.2B) per year over the new deal, an 83% increase over the existing contract. BT "won two packages -- to show Saturday evening matches and midweek fixtures, giving it 42 games -- an increase of four -- compared to Sky’s total of 126." The Premier League "has yet to start negotiations for overseas rights" which are certain to rise above the present £2.23B ($3.4B) deal. The new deal marks a value of £10M ($15M) per televised match, and is the second 70% increase in a row for the EPL, "whose status as the richest league in the world will be spectacularly enhanced by this contract" (LONDON TIMES, 2/10). In London, Mance & Blitz wrote Premier League revenues "have spiralled over the past two decades as the competition has emerged as the most-watched, and arguably most hard-fought, of the world’s major domestic leagues." Currently 80% of the League’s revenue "is divided among the member clubs," while about 6% goes to good causes, community facilities, school sports and lower-league teams. Some of the additional cost "is likely to be passed on to fans, although Sky said it would seek to fund most of the additional spending by cost savings." Both Sky and BT make a loss on their football coverage -- "but compensate by selling customers TV packages and high-speed broadband, respectively" (FINANCIAL TIMES, 2/10). Also in London, Mance & Thomas wrote that Sky "promised at least £200M a year in extra cost cuts," but some analysts "immediately questioned the wisdom" of the high cost. Bernstein analyst Claudio Aspesi said, “The trajectory is unsustainable. It feels like everybody lost.” Citigroup’s Thomas Singlehurst said Sky’s spending is “a questionable use of capital.” Analysts at New Street Research "were more sanguine," however, arguing that “large increases [in the cost of rights] have been absorbed successfully in prior seasons over a smaller customer base” (FINANCIAL TIMES, 2/10).
SCUDAMORE SURPRISED: REUTERS' Holton & Sandle wrote EPL CEO Richard Scudamore said that "he was surprised by how much the matches had fetched, but he noted that the game was the beneficiary of the two media giants using football to draw and retain customers" on their platforms for TV and broadband Internet. Scudamore: "These are huge companies doing huge things in a market that has gone way beyond football." Scudamore said that the League "had received a broad interest in its rights but would not say who else had bid to show the games" (REUTERS, 2/10). In London, Owen Gibson wrote even on a conservative estimate, "the total amount raised once international rights are taken into account" is likely to top £8.5B ($13B) over three years from '16-17. The BBC has already agreed to pay £204M ($311M) "to retain the highlights." That "would mean that even the bottom club" in the EPL would receive around £99M ($152M) while the champions would get £156M ($237M). The deal for 168 live matches per season "will come as music to the ears not only of clubs, but players and their agents." Previous increases in TV rights income "have tended to lead to a commensurate increase in wages." It "will also spark a renewed debate over whether the ever increasing TV riches will further constrict the chances of homegrown players and the ever growing gap between the Premier League and the Football League" (GUARDIAN, 2/10).
RUMORS: In London, Tom Peck wrote there had been rumors of bids from Discovery, which owns Eurosport and the Qatar based BeIn Sports, "but if they did bid in the strictly secret auction, they were unsuccessful." The huge windfall "will increase pressure on the clubs to drop ticket prices, now that the percentage of their revenue that comes from television" will fall even lower. Even now, "only a third of Arsenal’s income is taken from gate receipts and other match day costs like food." From '16 that "will likely fall to around a fifth." Scudamore said the Premier League’s clubs would "have to address the issue of ticket prices." He said, "Part of our broadcasting attractiveness is full stadia. The best product, the best players, and yes, full stadia" (INDEPENDENT, 2/10).
THE PROCESS: The BBC reported the bidding process "has pushed up the price for the right to broadcast Premier League matches substantially in recent years." Virgin Media CEO Tom Mockridge said the auction process was a license for the Premier League to "print money" and was "hurting fans." He added, "You can't blame the Premier League -- they are simply exploiting the sales process. But this is hurting fans and does not warrant an exemption from normal competition law rules" (BBC, 2/10). In London, Ben Rumsby wrote Sky "managed to increase the number of first-pick it currently holds from 20 to 26, with BT’s falling from 18 to 12, although it now has seven second picks as well." Scudamore "admitted surprise" at what was a second successive 70% increase in the value of the rights. He said to laughter, “Am I surprised? Of course, the little old Premier League, doing quite well here. Look, you laugh, but the reality is that compared with BT and Sky we are" (TELEGRAPH, 2/10). In London, Nic Fildes wrote media analyst Claire Enders said the deal "would result in players being paid half a million pounds a week for the first time." Enders: “None of this will trickle down to the grass roots. The explosion in cost is so phenomenal there is no rational explanation. Ninety-five per cent of this immense spend will go directly to players, and that’s paid for by the public” (LONDON TIMES, 2/11).
TWITTER REACTION: News of the record deal drew a wide range of reactions on Twitter.
