In Part 1 of this series on Modern Football I established the birth of the Premier League as one of the contributory events to the evolution of the game as it exists today. Negotiations between the clubs began when the “big five”, Manchester United, Liverpool, Arsenal, Everton and Tottenham Hotspur, were approached by Greg Dyke, head of LWT at the time, about featuring the top teams on television more, which he believed would be more financially beneficial to all parties. The clubs featured would get a larger slice of television revenues and the broadcaster would be able to recoup more in advertising.
The Co$t of Winning – Modern Football Part 2 Television
Once the clubs had sorted out the details between themselves they auctioned off the television rights, with Sky coming out on top with a bid of £304 million, beating ITV’s bid of £262 million in a deal which also saw the BBC secure match highlights.
Over the course of the Premier League’s history, the number of matches featured has increased from 60 per season to 154, and seen the current deal reach over £3 billion between the two broadcasters who currently hold showing rights in the UK – Sky and BT Sport – with worldwide rights on top of that.
The Football League
Since the top clubs split from the Football League it has fared less well in its dealings with television. In 1995, the Football League struck up a deal with Sky to cover its three divisions and the League Cup for £25 million a season.
In 2001, ITV Digital agreed to pay £315 million for the Football League rights. This seemed to be the Football League’s golden moment much like the Premier League had enjoyed ten years previously. However, it was not to be. Carlton and Granada, the owners of ITV Digital, hoped that football could drive sales and attract people to its digital platform much like Sky had done with its Premier League coverage in the early 90s. It was a gamble that failed. ITV digital failed to reach its target number of subscribers and fell into financial trouble. ITV digital tried to renegotiate the terms of its deal to ease its plight, but the Football League rejected the proposed £130 million reduction. In 2002, ITV Digital went into administration still owing the Football League £178 million. The Football League sued parent companies Carlton and Granada for the outstanding money. However, after their case was dismissed for not securing guarantees from Carlton and Granada, the Football League sued their lawyers for negligence over the deal. They won the case but were only awarded £4 instead of the £150 million they had been seeking, working out to roughly 5p per club.
The aftermath led to financial instability for many of the Football League’s clubs. After negotiating the ITV Digital deal, many clubs had already spent the incoming money on player transfers and high priced contracts and were stuck paying contracts without the expected income. Sky picked up the TV rights for £95 million for four years; a fraction of what the clubs had been anticipating from their original deal. Between 2001 and 2006, 15 Football League Clubs entered administration and clubs had to rely more on developing youth players and free transfers to cope.
BT Sport
In 2013, BT Sport emerged as a challenger to Sky Sports dominance of the football market in the UK. Inheriting 38 Premier League games from the now defunct ESPN UK, BT Sports built up their portfolio of foreign leagues to complement their English coverage, which also included the FA Cup. However in late 2013, BT Sport made a huge splash when it was announced that they had wrestled the rights for the UEFA Champions League from Sky and ITV. The Champions League had been on ITV since its inception, and Sky had held rights to show games since 2002. The £897 million deal means BT Sport will have exclusive rights to the Champions League from 2015/16 and signals a true challenger to Sky, making the next round of bidding for the Premier League rights very competitive.
Television’s relationship with football is very profitable for both sides at the highest level but can be a double-edged sword for those lower down. The Premier League has benefited hugely from Sky’s money and allowed clubs to purchase some of the best players from around the world, and has driven competition among the top clubs on the wages they can offer. The make-up of the Premier League where each team gets an equal share means the division is more competitive than those across Europe where, for example, in Spain most of the money is divided between Barcelona and Real Madrid.
On the flip side, however, the lower leagues have suffered due to the influence of television. The ITV Digital crisis left many Football League clubs in deep financial trouble, and the gap between Football League and Premier League money means that the Championship playoff final has now been dubbed the richest game in football, as the winner can receive up to £120 million guaranteed over three years even if they are relegated the following year, thanks to the initial season’s TV money and parachute payments in the following seasons. This disparity is causing some teams to overreach trying to get to the ‘Promised Land’, or spend beyond their means to stay there, with clubs ending up in the Championship with huge wage bills and struggling off the field, when things on the field have not gone to plan.
Television has significantly influenced the modern game, and continues to do so. It has allowed clubs to invest in better players and facilities which has resulted in the global product that is the Premier League, which is then broadcast around the world to millions. However in some cases, mismanagement of the resources that teams have to both chase and hold on to, pursuing the rewards of the Premier League, has led some clubs to the brink of ruin.
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