The Premier League's new TV deal and what it means
You would have done well so far to avoid the news of the record-breaking new TV rights deals agreed to by Premier League clubs totalling a staggering £5.136bn over 3 years from Sky and BT. This is an increase of 70% in TV rights money from the previous deal, which totalled around the £3bn mark – depending on the income from international TV rights this figure could reach as high as £8.5bn. In addition to this, Premier League clubs have also agreed to pass down £1bn to lower league clubs.
The deals agreed with Premier League clubs have inflated to incredible highs with each renewal, especially since the formation of the Premier League and separation from the Football League. The start of these football TV rights negotiations perhaps started in 1988 following a bid of £47m for rights to First Division football by Rupert Murdoch, prompting ITV to eventually launch a largely improved bid to maintain the First Division rights. The original Premier League deal saw a total of £191m paid over 5 years, rising exponentially after each renewal before arriving at the figure we see today. In comparison with other sporting bodies, for example American Football – the new Premier League TV deal is still relatively tame, with the current NFL deal totalling at £26bn over 8 years.
A point that has been debated for a number of years is does TV has too much power over football? Sir Alex Ferguson once compared the deals between the Premier League and TV broadcasters as “shaking hands with the devil” and branded some of the situations that arise from fixture changes as “ridiculous”, and this most recent deal will do nothing to subside this point of view which is one held by a great number of fans all over the UK.
As expected for Premier League clubs, this huge new deal will provide some very welcome revenue and will also benefit any charities and organisations that rely on Premier League funding. To put things into perspective, according to the chief executive of the Premier League, Richard Scudamore, Burnley are now economically a bigger club than four-time Champions League winners Ajax.
So, why is this new deal important for Premier and Football League clubs alike? Firstly, this new income of money means that all top flight clubs are able to pay full-time staff the ‘living wage’ – totalling £9.15 an hour in London and £7.85 in the rest of the UK, by the end of the 2016-17 season. In addition to this, the Premier League has also agreed to donate £56m a year to grassroots football, including the construction of 50 new artificial pitches. Furthermore, these donations are designed to increase participation, fan engagement, solidarity with the rest of the football league, and support disadvantaged groups.This is also the first time that Premier League donations have totalled more than £1bn, this is a crucial milestone and a sum of money of this size will no doubt help to subside some of the criticisms that there is too much inequality throughout the English game.
This all sounds very productive and positive, and it is also vitally important. In order to keep the English football pyramid as one that is the envy of a lot of nations in terms of depth of support and footballing quality, the funding has to remain at a very high level. However, one point of criticism is that like the previous deal, only 3% of these donations will be allocated to grassroots football – with a far more handsome sum going to Premier League clubs that are relegated in the form of parachute payments. While it is clear that some clubs can enter financial trouble upon relegation from the Premier League, it is the opinion of many that grassroots football is hugely under-funded and is in dire need of improvement.
There are still many other criticisms which surround this new deal and how the donations are going to be managed. For example, the TV rights deal has risen in value by 70% from £3.018bn, but the donations have risen by only 40% from £700m. It is perhaps fair to say that the donations could and even possibly should be higher than they are. A further point to consider is the input of the Living Wage foundation, and in particular Rhys Moore – who identified that while the living wage guarantee for full time workers at top flight clubs was a step in the right direction – “the vast majority of low-paid work in the Premier League is with sub-contractors”. This means that unlike Chelsea, who have promised to pay all full-time staff the living wage, this new Premier League deal does not ensure that all workers are top flight clubs are guaranteed an increase in wages.
With this new TV deal and higher than ever before donations – how can clubs throughout the Football League and in the Premier League in particular, continue to defend rises in ticket prices? It must also make for tough reading for fans of lower league sides who know money is tight, seeing the Premier League clubs get even richer and the divide become even wider. The Football Supporters’ Federation certainly believe that something needs to change, as they protested outside the most recent Premier League board meeting demanding reductions in ticket prices, and that this new TV deal over highlights just how much bigger the divide between the Premier League and the Football League has become.
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