Soccer fans being kicked to touch

PLATFORM:Money for Premier League soccer rights is still in the stratosphere, despite the recession, writes Richard Gillis

WILL 2009 mark the end of football’s gold rush? The thinking goes like this: take the huge levels of debt being carried by the Premier League clubs, put it against the backdrop of the credit crunch and the result will see the bottom falling out of the soccer economy.

Extend this analysis and you get back to some kind of “normality” (circa 1975), where every team has a chance to win the league, the monopoly of the big four is broken and players’ salaries fall sharply, as do the sales of Maseratis and holiday homes in Dubai.

It’s a nice, heart-warming story, but the analysis is flawed. While I do think things may change fundamentally as a result of the current economic climate, I doubt we’ll see a narrowing in the gulf between haves and have-nots. In fact, there is every chance the opposite will happen.

The desire to see the Premier League being taken down a peg or two is understandable. For a while, it has been difficult to love football and, like many break-ups, money has come between us. The top players, along with investment bankers, have been the poster boys of the bull market, while the greed, the vanity and the smirking arrogance of the football business have defined the past decade.

The people who control the game have taken our loyalty and sold it on, a process aimed at turning us from fans into customers. The elite game is now one of the most potent marketing channels in the world, down which is pushed all manner of stuff, from mobile phones and TV subscriptions to banks and trainers.

This division between fans and the players has created what the Americans call a “disconnect”. Note the figures: in 1966, the year England won the World Cup, the salary of team captain Bobby Moore was 2.2 times that of the average British worker. Today, Rio Ferdinand’s salary is about 237 times the British national average.

Television money is the single biggest factor behind this statistic. This year the bellwether deal for Premier League rights – currently held by Sky and Setanta Sports – is up for renewal. Despite the economic turmoil, there is little to suggest that the rights will not at least match the current amounts: Sky and Setanta paid £1.7 billion for domestic live rights and £650 million came from broadcasters outside the UK.

This money is essential for the top clubs as it represents at least half of their total revenue. (Note: in the 1991-92 season, the one before the Premier League was formed, gate receipts still generated half of the revenue of clubs in the top flight; television money provided only 9 per cent of turnover).

The Premier League is likely to benefit from competition between interested broadcasters. As reported in The Irish Times, Setanta is believed to have started talks with existing backers and new potential investors about securing hundreds of millions of euros in new funding – not the behaviour of a company willing to give up its Premier League rights without a fight.

Recently, Disney president and chief executive Bob Iger indicated that its sister company ESPN may consider mounting a challenge to BSkyB, “both individually and in partnership with others”.

However, if the market for television rights does not meet the expectations of club owners, particularly those most exposed to huge debt such as Chelsea, Manchester United and Liverpool, an alternative strategy presents itself, one that would broaden further the divide between themselves and the rest of the league.

Currently, Premier League rights are sold collectively, with the money shared between all 20 clubs. In the next deal, which will run from 2010 to 2013, the bigger clubs may try to end this centralised arrangement for rights sold outside the UK.

“They will seek to do unilateral deals and it will change the model completely,” a senior football executive told me recently. “The money will be astronomic.”

When Everton and Manchester City both fielded Chinese players (City’s Sun Jihai and Everton’s Li Tie) in a game in January 2003, it was shown live on state television in China, billed as “a Chinese derby” and watched by an estimated audience of 350 million. Think then of the potential audience for a game such as last weekend’s Chelsea v Manchester United, beamed live via MUTV or on broadband, directly to subscribers around the world, each paying as little as €1 each. Suddenly, the debts of Chelsea, Manchester United and Liverpool don’t look quite as daunting.

The problem, of course, is that without the balancing effect of collective rights sales, the big clubs will cream off the top of the market as they do in Spain and Italy, where Real Madrid, Barcelona and the Milan clubs exploit their brand to further distance themselves from other, less fashionable teams.

So, far from being the year that brought equality back to football, 2009 may go down in history as the moment it blew further apart.