£5.14 Billion.
Yes, £5.14 Billion
If you haven’t yet heard, the latest Premier
League domestic television rights were auctioned and the total paid by BskyB
and BT, across the seven available packages for 3 seasons from 2016/17-2018/19, was £5.14billion.
Now this is a lot of money.
It is undeniable; it is, a lot, of money.
Ex-Players, pundits and journalists - not to disclude your
typical irate football fan (who also tends to get irate and have opinions on
almost anything) - were quick to go onto Social Media and proclaim it ‘obscene, disgusting’ and accused the Clubs of 'money grabbing.'
Firstly, in order to address these concerns and opinions, we must lay out the specifics of the deal. BT paid £320m per season for their
packages. This equates to £7.6m per
game. BskyB paid £1.39bn per season, equating to roughly £11.07m per game.
Without going into too much debate, this can be seen as good
negotiating by BT and Sky overpaying, but please remember Sky got the choice
slots on Monday Nights and the 4pm Sunday games. As such these are worth more via
advertising revenue therefore the amount per game is worth noting but not
necessarily representative of over/under payment by either party.
The 5.14bn was 71% more than the last rights auction, which
by Sky’s own admission was £330m above their forecast. For context at the conception
of the Premier League in 1992, the five year rights package cost only £191m,
but there was vastly less games broadcast and Sky was the only rights
holder. Also given that in 1986 there
was no live football on TV, not even a highlights show on television. It shows just
how far English football has come in terms of quality and as a spectacle to be worth so much to the domestic market.
Secondly, now that the Business news is over, I shall proceed to
address the nonsense that has been floating around this week.
The crux of the whole
thing revolves around a few key facts.
Spoiler
alert: FOOTBALL IS A BUSINESS!
Whether
we as fans and lovers of the most beautiful game like it, football is a
business and big business at that.
The basic concepts of economics are Supply and Demand. If there is more Demand for a product (more
companies bidding for TV rights) and the volume of Supply for that product
(Premier League football) stays the same, the price will only ever go up.
A good example of the opposite is petrol prices. Demand (people filling up their cars) remains
fairly constant. Supply has been
increased by more Arab oil on the market. Therefore because there is more of the commodity about and the amount
people want remains the same, the price goes down.
This is true of Football.
I do hear those who say that actually the amount paid is too much and is
an obscene amount of money…which to an extent I do agree with them. However, I
am yet to see an internet naysayer quoting how much money would represent a
fair price and explain why.
Accusation One:
'..but what about the
Fat Cat Chairman greasing his palms at the fans expense?'
It is worth noting that again, this is a statement that can be proven to be undoubtedly true in
some high profile cases. No Chelsea fan
can seriously argue that Roman Abramovic bought Chelsea Football Club in 2003
due to him being a long-term fan that stood in the Shed End in the dark days of
the 80’s. He bought the club as an
investment vehicle and a way of basing himself in Britain.
However, the argument about ‘real fans’ not being able to
afford the price of football, due to the villainous foreign owner is a failed one.
The so called ‘real fans’ dominated the scene in the 70’s and 80’s. This
was a period of major football hooligan disasters at Football Stadia leading to
the expulsion of English clubs from European Competition. Do we really want these ‘real fans’ at our
grounds in 2015? I certainly don’t. The atmosphere really may not be what it was
twenty or thirty years ago, but I prefer being able to attend a football match and seeing younger kids walking into the ground.
Seeing Women in football grounds not harassed and intimidated by these ‘real fans’ is a
pleasure to see. The atmosphere may not be the
same, but I prefer the safety and inclusiveness of modern football to a few drunken louts chanting obscenities any day.
The last nail in the coffin to that argument is the
attendances. 95% of seats available for
sale are sold. If football really was
too expensive for the football fan, ground attendance would fall, not increase at it has this
season. Since the financial crash, a
large number of established Premier League Clubs have frozen Season Ticket
prices to protect their loyal fans from the pressure of inflation and
constraint on their household budgets in other areas. I salute those clubs for doing the right
thing.
Accusation Two:
'They’re all over paid prima-donas'
I imagine you, reader, are the hard working type. You try hard and work well to achieve the
best you can for yourself and your family. If you excel at your chosen profession, you
get promotions, you may even be headhunted.
You move on to another company. You get further recognition, you’re doing a
great job, your company is successful due to the business you are bringing in
and they also grow and expand. You are
the star of your company.
Should you therefore be paid as the best person in that
organisation? Should your hard work and effort to close those business deals
and bring success to the company be rewarded? Absolutely!
Would you turn down that bonus or
wage increase your hard work deserves to give it to the lady who cleans your
office block in the evening, or to the lady who cooks your breakfast? I’m not so sure.
Compared to the average fan, players’ wages are
astronomical. However your average fan
isn't at the very pinnacle of their profession and one of the best at their job
in the world. And if they are, then I
bet you they get paid the going rate for it!
To put this into context, Hedge Fund Managers can get paid hundreds
of millions of Dollars a year. To make
further context, LeBron James earned $72.3 million last year. Tiger Woods who is now 62nd in the
Golf world rankings still earned $61.2 million in 2014. This makes Wayne Rooney’s $23.4m and 43rd
place in the Forbes Top 100 Paid Sportsmen look distinctly average.
My point in all of this is that although the wages are pretty incomprehensible
to the fan that pays his 40 hard earned pounds on a Saturday afternoon, the top players he has paid to support are paid top wages as they are at the top of their profession. The Fan is entitled to his opinion as he pays his ticket money and as such has a certain right to critique their value of performance to wage. However the Players' hard work, sacrifice and value as a commodity to his club, shouldn't just be based solely against his weekly wage. Football Clubs are Businesses. It’s not a nice thing to acknowledge but they are. Football at the top level is not the same as
Sunday league.
Clubs all have Football in the Community Schemes, and one of
the benefits of Clubs being big Companies are that they generally all have good CSR
schemes to drive benefits back into the local communities. They run after school clubs in schools, they support local good causes. They also support global charities such as the excellent Right To Play.
A truly brilliant example of what a club can do for it's community is Manchester City’s recent complex and
redevelopment of a desolate area of Manchester.
A shining example of the good a football club can do in a community
through the increase in football TV revenues.
To conclude, the modern fan enjoys a great spectacle. They enjoy this spectacle, in a safe, well
maintained Stadium, whilst watching a selection of some of the greatest
footballers in the world. The armchair
fan can now also watch this spectacle in HD, and more of it than ever before.
Who’s for going back to the 80’s, with no TV coverage, run
down stadia and hooligans? ….anyone?
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