Liverpool managing director Ian Ayre this week opened the debate on foreign television contracts – arguing that Premier League teams should be allowed to negotiate their own deals. The proposal would replace the current structure – a £1.4bn contract which expires in 2013. Under the terms of this agreement, the revenue earnt goes directly to the Premier League, who then splits it evenly amongst the 20 clubs that make up England’s top division.
Personally, I think Mr Ayre has a valid point. Should each individual club be granted such autonomy, they would gain the ability to zoom in much more effectively on their fan base, and allow each boardroom around the country to make financial decisions that are best suited to the workings of the club.
For example, Blackburn’s much maligned Indian ownership must surely carry a great deal of interest in India itself. A rewrite of the rules would allow Blackburn Rovers to maximise the earning potential that they currently have on Indian territory. While there is always the possibility, through fan discontent more than anything else, of the Venky ownership being a relatively temporary arrangement, the potential to create a new generation of Indian Blackburn fans remains. These fans might (or equally might not) stay loyal to the club, should they like what they see on a channel like Star Sports.
While obviously not every club has such an obvious foreign market to tap into, they will surely be aware of the areas their support extends to. For example, Man United have a huge Asian following. Under the proposed regulations, they would be free to negotiate a deal with a Japanese sports network, one that would perhaps want exclusive foreign coverage, and be willing to show every match. That would add up to a hell of a lot of extra revenue for the Old Trafford outfit, on top of the generous coverage they already get in this country.
One important issue that should be raised however is that ending the even split of foreign television monies creates the risk of widening the gap between rich and poor even further. A name like West Brom for example does not have quite the same resonance as an Arsenal or a Liverpool would. They would lose out on the guaranteed revenue that the evenly split deal provides, and set free into an apparent wilderness of worldwide support. However, it would give the club control over their own financial destiny – perhaps throw up creative methods of foreign promotion; the building of bridges with other footballing communities, and eventually zero in on a potential fanbase that they wouldn’t have dreamed of in the current relatively safe economic fortress of a Premier League-backed contract.
Realistically of course, this will not happen, at least not yet. While the points raised by Ian Ayre make financial sense, particularly for the top clubs (interestingly Ayre works for an established English football powerhouse), the immediate risk for the game’s lesser lights make it a non-starter – 14 of the 20 Premier League clubs must agree to it.
Spain has adopted a similar strategy, where Barcelona and Real Madrid sell their own TV rights, but the monopoly they hold over the top 2 positions is perhaps a sign of what can happen. Then again, is the Premier League as a whole a greater draw than La Liga? Perhaps one day we will find out.