£5bn Premier League deal: bad news for fans and TV viewers?
The massive cash injection into the top flight is likely to go on players and their agents
As predicted the new deal for live Premier League TV rights has shattered the £5bn mark, with Sky and BT Sport breaking the bank to retain their share of the games.
The new deal is actually worth £5.136bn, an increase of 70 per cent on the previous agreement, and although a few more games will be televised, it means that each match will cost the TV companies, on average, £10.2m to show.
Sky has had to fork out the most to retain control of its five 'packages' of games, the most that one broadcaster can hold. In 2012 it paid £2.28bn for the right to show 126 games a season, including the Sunday afternoon and Monday night matches. This time round it had to write a cheque for £4.18bn.
BT Sport also held on to the two other packages of matches. It will screen 42 games a season – four more than under the current deal. It paid £980m for the rights, up from £738m last time.
But what impact will the new deal have on football?
The Premier League
Premier League clubs will be the big winners. "The total raised from the deal once international rights are taken into account is likely to top £8.5bn over three years from 2016-17," reports The Guardian, "meaning even the bottom club would receive around £99m, while the champions would get £156m."
In other words the side coming bottom of the table under the new deal will earn more than current champions Man City did last season, and all 20 of the teams in the top flight will automatically be among the top 30 richest football clubs in the world.
Players and agents
In 2012, after a then unprecedented £3bn TV deal, Premier League chief executive Richard Scudamore urged clubs not to spend all their extra cash on players and wages. "They proceeded to largely ignore him and, without intervention, there is nothing to suggest they won't do the same again," writes Owen Gibson of the Guardian. "The first £500,000-a-week Premier League footballer cannot be far away."
And it seems Scudamore has accepted that the money will go on a handful of superstars. "The reality is, just like in the film industry, in the pop industry, the talent, the absolute talent, gets paid a disproportionately high amount," he said after the latest deal. "That is the reality in any talent industry. The stars that grace the field in the Premier League are world stars, it's a world market. I don't set the market rate, it's set by the world market."
Surprisingly, they could also benefit through reduced ticket prices. The staggering amount of TV money means that match-day revenue through ticket sales is no longer so important to top-flight clubs, and there are hopes that clubs "will respond with a definitive gesture" such as cutting the price of away tickets, says Gibson.
"As matchday income becomes comparatively less important – a club such as Chelsea now only make just over a fifth of their overall revenue from ticket sales – there is a creeping realisation that action is required to maintain the vibrant atmosphere that helps power TV income at home and abroad.
"Growing commercial revenues abroad is all very well but strengthening bonds at home is important too."
The news might not be so good for supporters who prefer to watch football on TV, or indeed watch anything on TV, reports The Times. "The huge rise in costs per game – 18 per cent per game for BT and 83 per cent for Sky – shows how important the sport is in locking down high-spending users, but the spend could affect investment in other content."
The paper says that 27 per cent of the UK's TV budget is now spent on football, but football accounts for less than one per cent of total viewing. Not only could the quality of non-footballing programmes fall, but the cost of subscribing could increase.
Teams outside the top flight
The widening gap between teams in the Premier League and those in lower divisions is a real concern. Relegated teams benefit from 'parachute' payments but that has helped create a group of 'yo-yo clubs' who are unable to survive for long in the top flight but have a significant financial advantage over their rivals in the Championship.
Could fans of clubs like Nottingham Forest or Brighton, well supported but without the financial clout needed for promotion, end up paying even more for tickets and merchandise as their clubs try to keep up with the yo-yo teams?
The situation is even worse further down the football pyramid. All teams in the football league received a share of the TV money, but the BBC reports that only five per cent of the Premier League's income filters down to the grassroots.
"This issue is one of the most emotive," it says. "The Premier League was very quick out of the blocks to say it will invest £168m in 'facilities and good causes' and build 152 3G pitches," writes Ben Smith. But he adds that the figure "should also be seen against the backdrop of Premier League clubs paying agents £115m between October 2013 and September 2014".
He offers an example of how skewed things have become. "FC United of Manchester, for instance, are attempting to raise money to fund their new stadium, which would be used as a community hub, centre for kids and youth club. That could be paid for with the amount of money Sky or BT is paying to broadcast one live match."
However, the clubs now surely have enough money to put some aside and deflect accusations of a "culture of greed", says Owen Gibson of the Guardian. "It is one of the enduring shames of the Premier League age that the same endless debate about facilities and coaching is still taking place 23 years after the top clubs broke away to create what has become an incredibly popular consumer entertainment product."
But what of the national side? If the clubs spend their money the way everyone expects it could undermine the England team still further. Alan Sugar, talking to the BBC, called it the "prune juice effect" - the money goes in one end and comes out of the other.
"We don't have a chance of winning World Cup or European Championships again, it's because of money thrown into the league in order for Premier League clubs to survive by hiring in players from abroad and not allowing young players to come and learn their trade," he said.