Premier League TV rights grow to £5.1bn but case for redistribution strengthens

The Premier League’s longstanding ringmaster Richard Scudamore is fond of referring to its all pervasive Barnum & Bailey routine as his No1 priority.

Perpetually under pressure to redistribute more of the Premier League’s TV billions to what it likes to call “good causes” (and what others might call the rest of football), he makes the not entirely unreasonable point that without investing huge sums in the best players and facilities there would be less of everything to go round.

“We can’t be clearer. Unless the show is a good show, with the best talent and played in decent stadia with full crowds, then it isn’t a show you can sell,” he once told the Guardian. “I see none of those fundamental building blocks being reduced. In fact I see the opposite.”

He has been proved right by today’s telephone-number figures. The total figure of £5.136bn represents a 70% increase on the last UK television deal. Between them, Sky, who again won the pick of the seven packages, retaining both the prestigious Sunday and Monday evening slots, and BT, who kept two of the smaller packages, are now paying over £10m per Premier League fixture.

In pure revenue raising terms Scudamore and his small cabal of lawyers and rights experts, who are responsible for an auction structure that has become a licence to print money, deserve the backslapping reception they will receive from the 20 clubs for vastly increasing their income once again.

Scudamore sat at a press conference three years ago and warned clubs not to squander their 70% increase entirely on agents and wages. They proceeded to largely ignore him and, without intervention, there is nothing to suggest they won’t do the same again. The first £500,000-a-week Premier League footballer cannot be far away.

Media analysts and City experts have stopped asking when this particular bubble is going to burst and started speculating on whether it will defy economic wisdom by continuing to inflate. As one source close to the auction said, it is becoming increasingly clear the bubble won’t burst but will simply change shape depending on who is in the market.

With the BBC’s Match of the Day offering (now to expand to include a midweek show from 2016-2017) catering for those who can’t or won’t pay for pay TV and digital media, BT’s arrival as a major force in sports broadcasting could not have come at a better time for Scudamore, ensuring the presence of at least two companies with clear strategic reasons to invest way beyond what matches could recoup in standalone terms as they scrapped over TV, broadband and phone customers. Soon, they will add mobile to the mix too.

Meanwhile, the Premier League has proved increasingly adept at marketing its product overseas, with the US, India and China still showing plenty of room for growth.

That sell is only becoming more sophisticated, with live events and distinct commercial offerings from clubs complementing one another to build audiences further. From Jakarta to New Jersey, it is only possible to see international deals going the same way and the current total of £5.5bn over three seasons being comfortably surpassed.

In an age of financial fair play when the books must (just about) balance, clubs increasingly look to media and commercial income to pull away from European competitors.

Healthy broadcasting income, driven by fierce competition for customers in the communications market and the popularity of the Premier League overseas, paired with a collective selling model that sees money redistributed more fairly than other leagues has boosted the earning power of English clubs compared to their European rivals.

Fourteen of the 30 biggest earning clubs in the world were English, according to the Deloitte Money League published last month. All 20 Premier League clubs appear in the top 40.

But as the 20 clubs gorge themselves on another huge hike in cash from 2016-2017 thanks to competition that has driven the overall take from live games alone to £5.136bn,the questions about how that money is spent will return at an ever louder volume.

Every time the Premier League announces a new rights bumper haul, the queue starts to form outside its Gloucester Place HQ of those wanting a slice of a cake that has grown to gargantuan proportions in the 23 years since Sky first paid £191m over five years for 60 matches per season.

Some see those within the gilded circle (and those on the periphery in receipt of increasingly generous “parachute payments”) as greedy toddlers at a birthday party unable to stop cramming more cake into their mouths, oblivious to those hovering underneath trying to catch the crumbs.

Over recent years, the Premier League has become increasingly aware of the fact it must be seen to be helping those beyond its borders. It points to the huge tax take from players’ wages, to the benefits to UK plc of the Premier League’s popularity abroad. More specifically, it argues that more than a sixth of its overall income is distributed beyond the 20 clubs.

Even the invitation to the press conference unveiling the latest deal came with a reminder of the Premier League’s community programme at the bottom as if to ram home the point.

But the fact is the majority of that cash goes to Football League clubs in the form of parachute payments to relegated clubs and so-called “solidarity payments”. Only around 4% of the Premier League’s income filters down to the grassroots.

This time around, there is a feeling abroad that the sums are so huge that the elephant in the room can no longer be ignored.

Fans’ groups protesting about the cost of attending football and raising long standing concerns about ageing crowds and a generation being lost are hopeful that the Premier League will respond with a definitive gesture such as an across the board price cut for away fans.

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, especially as the latest deal chips away even further at the sacred 3pm Saturday window with the introduction of up to 10 Friday night games that will be great for TV viewers but not so special for travelling fans.

For the comparative peanuts it would cost them, such a gesture would be worth it in PR terms alone. Likewise stumping up the £50m the Football Association needs to deliver on its long overdue £150m plan to start overhauling the shockingly dilapidated stock of pitches in this country.

When the league is awash with billions, English football’s petty turf wars that habitually derail discussions over who should pay for what start to look even sillier than usual.

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.

The concept of pooling money centrally is now well established – see the £340m plunged into the elite players performance plan to overhaul the academy system and the existing Away Fans’ Fund – and the Premier League ought to be bolder in putting more aside for the wider good.

Scudamore would argue that it cannot be held responsible for selling off the playing fields, squandering the Olympic legacy or the obesity crisis and that his job is to get on with the show.

But with the sort of cash now swilling through its coffers, it can start to do something about them and in the process make it much harder for politicians such as the shadow sports minister Clive Efford to accuse it of fostering a “culture of greed”.