That great and noble club, Liverpool, is proposing to ditch the TV rights deal which has kept the Premier League competitive, in favour of trousering more cash for itself. This is a move that must be resisted.
It was Liverpool`s managing director, Ian Ayre who proposed that when the current Premier League deal for international broadcasting comes to an end in 2013, it should be broken up, and that individual clubs should be entitled to negotiate their own deals for international broadcasting. In a reference dripping with irony, Mr Ayre cites the Spanish model as the one that he`d prefer.
Ayre believes the Premier League’s four biggest global draws – Liverpool, Manchester United, Chelsea and Arsenal – deserve an increased share from 2013. ‘Personally I think the game-changer is going out and recognising our brand globally,’ said the Liverpool managing director, using the ‘brand` word that sets most football fans` teeth on edge. ‘Maybe the path will be individual TV rights like they do in Spain. There are so many things moving in that particular area.”
And in making his proposal, Ayre manages to alienate one of the other 20 clubs who will vote on any proposal. “What is absolutely certain is that, with the greatest of respect to our colleagues in the Premier League, but if you’re a Bolton fan in Bolton, then you subscribe to Sky because you want to watch Bolton. Everyone gets that. Likewise, if you’re a Liverpool fan from Liverpool, you subscribe. But if you’re in Kuala Lumpur there isn’t anyone subscribing to Astro, or ESPN to watch Bolton, or if they are it’s a very small number. Whereas the large majority are subscribing because they want to watch Liverpool, Manchester United, Chelsea or Arsenal.”
Let`s run through the elements of this dreadful idea. Firstly, anyone who cares about English football should recognise that the Premier League has become the best league in the world (this is not my opinion but the statistical analysis of the IFFHS) partly because of the way that it distributes TV rights, and that this system is a guarantee that the Premier League stays competitive. When the Premier League was established in 1992, the clubs involved set up a system whereby the distribution of TV rights helped mitigate the financial differences between clubs. Domestic rights are distributed according to a system whereby everybody gets a fair volume of cash, and the difference between, say, Manchester United and Blackpool is not that huge: ManU received twice as much in domestic TV rights than Blackpool.
There is, however, a separate deal for international TV rights, which sees all clubs receiving the same amount. It is this element that Ayre is proposing to change. “So is it right that the international rights are shared equally between all the clubs? Some people will say: ‘Well you’ve got to all be in it to make it happen.’ But isn’t it really about where the revenue is coming from, which is the broadcaster, and isn’t it really about who people want to watch on that channel? We know it is us. And others. At some point we definitely feel there has to be some rebalance on that, because what we are actually doing is disadvantaging ourselves against other big European clubs.”
You could argue that, with all their hardcore support in Thailand, it`s only fair that Liverpool should be entitled to a larger slice of the cake, and that Ayre is proposing a change only to the international rights. Neither argument actually holds, and what Liverpool is proposing is dangerous. The precise example that he cites is exactly what English football should be resisting.
There are many elements of the Premier League`s success, but the collective bargaining has clearly been one of them. It is this collective distribution of rights that has ensured that, unlike many of our ‘rivals`, the Premier League has stayed a competitive competition. One of the reason why so many people like the Premier League outside of England is that the outcome of the competition is not actually decided before the kick-off in August. Even if a total of four clubs have won the competition, you can point to the slip-ups and the fact that many seasons are not decided until the bitter end. There is always a feeling that many clubs can compete, even if few of them actually do.
And the distribution of television money is a key element to keeping it competitive. If you change the elements, you will make it less competitive and therefore less interesting and less attractive overseas. Changing the way that international TV money is distributed is the start of dismantling the system: it is, for instance, revealing that Mr Ayre`s proposal is not that there be a pro-rata distribution of the international rights, he wants each club to be able to negotiate their own deals. The logical next step would be to extend individual deals to the domestic rights. When that happens, we can all say goodbye to the competitive nature of the Premier League as the gap between the rich and the poor clubs will become so huge that it will cease to become a competition.
You can see what Mr Ayre would like, as he puts Liverpool on the side of the rich clubs. Which they are. Breaking up the collective rights would allow Liverpool to negotiate its own deals which would net Liverpool considerably more money. But in doing so, it would also deprive Bolton, who were patronised explicitly by Mr Ayre, of a lot more money. This is close to a zero-sum game, i.e. that to bring Liverpool more money (or even more money) it would be necessary to deprive Bolton of that money. Then you have to ask who needs that money more: Liverpool or Bolton?
The answer is that the damage to Bolton (and to the competitive nature of the competition) would be a lot greater than the benefits that the extra cash would bring to Liverpool. Just in case anyone thinks that this is a gratuitous dig at Liverpool, please bear in mind that Chelsea would be one of the beneficiaries of this scheme, as Mr Ayre himself recognises.
However, it is important to preserve the competitive nature of the Premier League. In fact, we should do everything in our power to avoid the English game going down the road of the Spanish Liga, precisely the example cited by Mr Ayre.
Many people think that the Spanish Primera Liga is the best in the World. They are mistaken. The Spanish Primera Liga contains the two biggest clubs in the World, but as a competitive competition it rivals the Scottish Premier League for boredom. One of the main reasons for the Liga being so uncompetitive is the way that TV rights are distributed: it is each club who negotiates this individually.
This is a system which has netted Barça and Madrid even more money, whilst maintaining the other 18 clubs in their condition of cannon fodder. By way of example, the money that both Barça and Madrid make from TV rights alone is more than the entire budget of the third biggest Spanish club (Atletico).
This has been a major factor in the increasing gulf between Barça and Madrid, on one hand, and the other 18 clubs, on the other. Whereas Barça and Madrid are the two richest clubs in the world, there are no other Spanish clubs in the top 20. The gap between Barça and Madrid has become so huge that the other two Spanish clubs in the Champions League (Valencia and Villareal), who are far from being the smallest, cannot even attract a shirt sponsor this season.
As a competitive competition, the Spanish Liga simply doesn`t exist. Since Valencia won it in 2002, the title has alternated between Barça and Madrid and in recent years, they have alternated as the first two. In the last two seasons, the gap between Barça and Madrid and the next team in the table has been more than 25 points.
This is no longer a competitive League. Whilst for years people have held up Spanish football as exciting, they have been confused at the excitement of the two big clubs. People have cottoned on now, and a group of clubs, led by Sevilla (again, one of the bigger clubs) are threatening to leave the Primera Liga as they are fed up with making up the numbers.
Central to the uncompetitive nature of Spanish football is the way that TV money is distributed, and it is this unfairness that clubs other than Madrid and Barça are denouncing. This is the example that Liverpool are holding up as being what Liverpool FC would like. It will start with the distribution of international TV rights, and then extend to the domestic right. It`s the death of top flight English football. For its selfish nature this plan should be resisted at all costs.
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