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End of an Era for Television Revenue Distribution?

End of an Era for Television Revenue Distribution?

Posted on 12. Oct, 2011 by in Blog, Debate, News

Ever since the Premier League’s inception in 1992 its constituents have been able to shelve even the fiercest of rivalries in order to thrash out fair and even distribution agreements for the billions of pounds that is raked in from TV deals each season.

The current arrangement sees 50% of this revenue shared equally, with 25% being set aside for television appearance fees and the other 25% according to a club’s finishing position in the table.

Although this favours the more successful clubs, it is far from crippling to the lowlier sides, some of whom rely on it solely to stay afloat rather than to be competitive.

For example, The Guardian report the difference between last year’s highest and lowest earners, Manchester United and Blackpool, to be just £21.2m. The Red Devils picked up £42.4m for finishing top of the pile, while The Seasiders collected exactly half of that in their relegation season.

Of course, the Manchester Utd’s and Liverpool’s of the league will always enjoy superior commercial activity aside from television rights, but it is the even distribution of funds from the likes of Sky, ESPN and the BBC that prevents the already immense chasm between the rich and the relatively poor becoming totally immeasurable.

And this arrangement now looks to be in jeopardy as Liverpool Managing Director Ian Ayre openly flirts with the prospect of breaking away from the pack and seeking broadcasting revenue for the club on an individual basis.

While it would no doubt provide a shot in the arm for our own financial muscle, it would signal the end of an era for the Premier League as a collective. In an industry so dominated by cold, hard cash it is highly unlikely that there will be any interventions to stop this from happening, and other top clubs are sure to follow suit, albeit somewhat reluctantly.

It seems inevitable, then, that the rich will keep finding ways to get richer. Someone has got to take the next step first, and in this case it looks to be Liverpool who will pave the way for a new era of TV revenue distribution.

While we may be criticised, even demonised for doing so, the reality is that Ian Ayre is only really saying what everyone else looking to stay in touch with the chasing pack is thinking. And in a backwards and selfish sort of way, he deserves a lot of credit for that.

23 Responses to “End of an Era for Television Revenue Distribution?”

  1. David McQueen

    12. Oct, 2011

    La Liga is shite because of this – advantage is we have 5 or 6 teams that will benefit from it but you’d still see a bigger gap opening. Personally hope a compromisr can be met.

  2. Sam

    12. Oct, 2011

    Yup. Let’s turn the EPL into La Liga….because we all know how fun and competitive that league is….

  3. Ena

    12. Oct, 2011

    Cash. Cash. Cash…..Than more Cash.
    That is all your beloved owners care about. They invested less than 60 mil of their own money, and already they want it back.
    With that kind of ambition, you will win the same amount of trophies as Arsenal.
    Seems like Premier League is really turning inti La Liga, both on competition ( Man Utd, Man City) and TV rights aspects.
    Good job !!! It makes perfect sense that Premier league end up threatened by their biggest and the most noble club.
    Good job Liverpool FC !!!

  4. anfield rd dreamer

    12. Oct, 2011

    How short peoples memories are! The only reason we have the premier league, sky sports coverage and the most commercially successful league is because 20 years ago the then ‘big 5′ fed up of being 2nd class to the big Italian and Spanish sides and taking home the same cash as the rest of the 4 divisions of teams in the football league decided to lead a top flight breakaway and form the prem an sign with the new formed sky sports! All Ian is suggesting something similar for foreign revenue not change domestic. Unless you think its right for a Thai fan to say pay 100 quid to watch all 20 prem teams of which we then get 5 when all he really wants is to say pay 40 (less than half) we get 20 and the other 20 is shared out between the opposition teams. Why should foreign fans be charged super high fees to watch ALL games when they just want to watch ours which would be cheaper for them and better for us! Why should a Liverpool fan in Brazil have to equally fund Manchester united and everton as much as Liverpool?

  5. Money

    12. Oct, 2011

    computer hackers are hacking for fun , they might just upload or create a live stream portal for the fun of it. People will stop paying if this really happen!

  6. anfield rd dreamer

    12. Oct, 2011

    Sam 3 teams have won la liga within the last 10 years I’ll let you guess how many have won the prem within the last 10 and then let you rethink your comment. Don’t believe the media hype about things all the time Barcelona the top team in the world right now lost to a newly promoted team that were relegated straight away last year and have already dropped more points this year than either of the Manchester clubs have in our league.

  7. anfield rd dreamer

    12. Oct, 2011

    Ena business men buy a sports franchise and want to turn it successful on and off the pitch so they receive the financial benefits hmmm shocking! Prefer that to some Arabian or Russian playboy who has cash to spend for fun turns the club into their personal toy with huge operating costs and wage bills that can’t sustain itself without the influx of the owners cash….really great position to be in when the owner eventually gets bored. At least we will be run as a self sustainable club that will be generating its own funds to achieve and maintain success even if it is in a less exciting way!

  8. anfield rd dreamer

    12. Oct, 2011

    Quick economics lesson for all you bleeding hearts worried that wolves and the likes will go out of business if they lose the (small) foreign revenue money they currently get. Say 10 foreign Liverpool fans can afford to pay 100 quid each to watch every prem game each team getting 5er off each customer 50 quid each in total. Now it changes instead its only 38 to just watch your teams games 19 goes to your team 1 quid each to your teams 19 oppenents. The same ten fans now pay less per customer but 190 goes to their club and 10 each to the other clubs. Unfair? But now the main point, its less than half price! More customers can afford it! If 5 times more customers buy the product then even the ‘lesser’ teams would break even (and that’s with no fans paying to see them) but the teams fans want to pay to see are suddenly in a much better position and more fans get a cheaper better product! Why is that a bad thing?

  9. Sam

    12. Oct, 2011

    You realize none of this matters anyway right? They need to get 14 EPL teams to vote with them. Novah hoppin’

  10. David McQueen

    12. Oct, 2011

    Current rules – these can change..and no doubt will. If Utd, Liverpool and Arsenal start to show their strength then not much the other clubs can do. The EPL is unique – even if this did happen you’d have city, Utd, arsenal, Liverpool and chelsea still competing with spurs not too far behind – what real dIfference?!

  11. Ena

    12. Oct, 2011

    Even if this happens, Liverpool from TV rights can’t make more money than Man Utd, or can’t make more money than sheiks. Man City and Man Utd would benefit most from this, and would become even more superior. My personal opinion is that this will happen sooner or later, only this time Premier League would have been much weaker. Therefore La Liga would become superior, simply because Real Madrid and Barca have the most attractive and the most talented players, also they will be more succesfull in CL.

  12. anfield rd dreamer

    12. Oct, 2011

    Ena real Madrid and Barcelona already do this and already are superior because of it! That’s what Ian is saying we (english football) are on the verge of being left behind by the European super clubs again like when the top Italian clubs were dominating finances in Europe in the late 80s early 90s before the creation of the prem to combat it. If we dont do it to we will lose out it already happens in spain won’t be long before the other European leagues follow suit and then the prem will lose the foreign market and therefore the foreign revenue anyway and we all lose out!

  13. Tom

    13. Oct, 2011

    Not sure if I support the idea. I like to have the opportunity to watch other EPL games and not just one team. Can I see myself paying more $$ just to watch one team? ummmmm I don’t think that’s fair.

  14. Ena

    13. Oct, 2011

    Anfield rd dreamer
    I understand you. But money from TV rights, that makes Real and Barca superior in La Liga, Man City is getting from sheiks, Man Utd from Fergies wisdom and revenues. We already have Real and Barca here in Manchester clubs (like it or not, at some point City will hire a decent coach). The only things that is different from La Liga are derbies, uncertainty, surprises. That is Premier League. You see, typical Premier League suporter, eg Liverpool fan doesn’t watch only Liverpool matches. No, he want to see Man Utd (when they lose, in derbies hoping they will lose, when they draw with shitty team etc). Same goes for Chelsea (and that is quite more often), City, Arsenal or Tottenham. Very few of Liverpool supporters want to see Liverpool and Liverpool only, in England or abroad. If you take that from them, It will be a form of deprivation of the right, freedom, choice. Most Premier League fans will not fancy that idea. Premier League will become weaker and weaker over time while your TV rights income will be spent on new stadium. Real Madrid and Barca are not self sustainable, with all their money, they are in huge debts.
    To be superior and win things you have to spend big or to have freaking geniuses for coaches and scouts. Today you can not win things and be self sustainble. That is the fact.

  15. FrostedFlames

    13. Oct, 2011

    I am an LFC fan in America and honestly I don’t like this plan at all. For one, I don’t want to see only Liverpool games. I like seeing the other teams play too. Secondly, this plan will widen the gap between the rich clubs and the poorer ones, and I think that is bad for the league. What makes the Premier League so exciting this season is the fact that you have 6, maybe 7, genuine contenders for Champions League football at the top. I want it to stay that way and I hope more teams become contenders. Increasing the financial stratification will make this more difficult and the league becomes stale if you can predict where everyone will finish before the season even starts.

  16. anfield rd dreamer

    13. Oct, 2011

    Think your missing a few important things tom and frosted. For 1 it would work out cheaper for you guys to pay for just our 38 games as opposed to every prem game. There would obviously still be options to get the rest of the games as add ons or as a more expensive total package like what I assume you must be paying now.

    • Sam

      13. Oct, 2011

      We have sports packages in the US, don;t nkow how it works in other countries. I pay $8 extra a month to get Fox Soccer and a handful of other sports channels, and I honestly like being able to see more than just Liverpool games.

      Are you saying teams are going to charge $3 a piece or something like that? Dream on.

  17. anfield rd dreamer

    13. Oct, 2011

    The main point people ate missing in all this is that this has already begun, it exists in Spain and the other big clubs will eventually follow even if England doesn’t. You know what will happen then? We will have a ‘competitive league’ alright. Just like the French league! But just like in the 80s and early 90s every decent player in our league will be poached by more financially strong foreign teams our league will once again become a lesser one foreign audiences will follow the talent and switch to more readily accessible leagues that have all their favourite stars in. All the money of British revenue will still go to the top clubs, the likes of Wigan still won’t stand a chance at winning the championship and our teams will start doing worse in Europe and we will start getting less slots in European competition. The first steps of this have already started with Real Madrid and Barcelona when juventus, the Milan clubs, bayern and ajax and the likes join in man city will be the only club that’ll be able to compete, well until their owner gets bored and sells them for an Italian side.

    • Sam

      13. Oct, 2011

      You understand that Spain has been looking as passing legislation to move things in the OTHER DIRECTION right? They are currently trying to move towards what the EPL has now. Did you pay attention AT ALL to what happened this summer, with teams going on strike?

    • Sam

      13. Oct, 2011

      And what is this about “well until their owner gets bored and sells them for an Italian side”? You realize Italy lost a UCL spot for next year right? Germany passed them in the coefficient, and England is still the top placed league.

      Wake up, Dreamer.

  18. anfield rd dreamer

    14. Oct, 2011

    Sam the problem Spain has is domestic and foreign revenue is unfairly distributed Ian is just talking about foreign money which no English club gets that much of at the moment. It’s the media that have implied he wants it domestically too he never mentioned domestic at all. Domestic should remain as is. But for foreign fans there should be a choice between the full prem and just the club they support which would be less games therefore cheaper! If its cheaper more fans can afford it revenue increases everybody is a winner. And I used city losing their owners to an Italian club as an example of what would happen if the league lost its glitz and glamour and one of the other leagues became the glamour league. Unless you think the owners bought city out of their love for the club instead of the chance to be involved in the most glamourous league? Wasn’t saying would happen now.

  19. Tom

    14. Oct, 2011

    There is no way that DirectTV would ever go for that kind of a deal. I am a big LFC Fan and enjoy watching other games. See how they play. I do not want to be forced to by games for one team. I can see maybe adding some sort of a package for particular team you get extras similar to what LFCTV is interviews, conferences before the game, maybe interviews with players after the game but this will never happen with US based providers.

    I know some of you are very sensitive when it comes to USA but just cuz we live here we agree with everything major corporations do. Trust me I came from a communist country and had everything dictated to me for yrs. In any case this is a very hard subject to see eye to eye. I am sure there will be a lot of behind the scenes debating before this will ever happen… who ever has $$ will get their way… ;)

    • Tom

      14. Oct, 2011

      Correction we don’t agree with everything corporations do…