English Premier League seeking a bigger cut on a TV deal
LONDON (AP) — The English Premier League’s leading clubs will seek a larger slice of international television cash at a summit this week, with Liverpool owner John Henry expressing irritation at the ongoing subsidizing of lower-ranking teams.
Along with the rest of the top six, Liverpool last year failed to secure an agreement on a new formula to end the equal split of income from overseas channels between the 20 clubs. But talks have continued and the divisive issue is set to be the main talking point at the league’s annual meeting on Thursday when a consensus will be sought.
“It’s a disagreement based entirely on governance,” Henry told The Associated Press. “Everyone in the league knows what the large clubs bring to the value of foreign rights, but the large clubs do not have the votes to change something that should have changed as media rights changed over the past 25 years.”
About half the clubs in October accepted 35 percent of the foreign TV revenue being dispersed based on league positions but any change requires the approval of 14 teams.
There is a meritocratic allocation of domestic TV revenue, with half split depending on a team’s finishing place and live appearances on British channels. The remaining half is shared equally, giving each team 34.8 million pounds ($47 million).
Since international revenue is distributed equally, the 20 clubs each collected 40.8 million pounds ($55 million) last season regardless of where they finished in the standings or how appealing their games are to foreign viewers.
“You cannot stick with the same media strategy forever any more than you can stick with the same football tactics forever,” said Henry, the Boston Red Sox owner who led the Fenway Sports Group takeover of Liverpool in 2010.
Liverpool earned 145.9 million pounds ($195 million) from the league in the recently-completed season. For finishing fourth, the club collected 32.8 million pounds ($44 million). Demonstrating their domestic appeal, the Champions League finalists banked 32.7 million pounds ($44 million) based on their Premier League appearances in Britain — more than the three teams above them and the same as sixth-place Arsenal.
The distribution model ensured that even last-place West Bromwich Albion received 94.7 million pounds ($127 million), bulked out by the foreign cash that does not take into consideration the team’s popularity. British broadcasters are also obliged to show each team live at least 10 times per season. Despite only nine of its games being aired, West Brom still received domestic income based on the minimum requirement being met. Additionally, to soften the blow of relegation, West Brom will also receive up to 90 million pounds ($120 million) over the next three years if it remains out of the top-flight.
“Because of this arrangement (the distribution of overseas revenue) and due to parachute payments to relegated clubs, the top three clubs each year in the Premier League receive less overall TV monies than the bottom three clubs when you include parachute payments,” Henry said.
“It’s hard to imagine this continuing much longer. In America, where we have closed leagues, you can argue for these types of arrangements, but it’s much more difficult to ask independent clubs to subsidize their competitors beyond a certain point when you have relegation and especially with the way media is rapidly changing and being consumed today.”
When the league was established in 1992, clubs never anticipated the overseas demand to watch games as English football was in the doldrums after being blighted by crowd disorder.
But now the league is enjoying a huge uplift in the value of rights overseas. There was a tenfold increase in China to $700 million and NBC’s six-year deal in the United States through 2022 is worth $1 billion.
The league has looked to the sale of overseas rights to provide an upsurge after the value of domestic rights flat-lined .
At the same time, clubs like Liverpool have to compete with rivals funded by states, including Abu Dhabi-owned Manchester City.
“There is no doubt about it, an unlimited financial budget will produce wins in football, but for me to complain about nation-state budgets would be ridiculous when we can similarly outspend other clubs throughout Europe and we do,” Henry said. “That’s unrelated to the equal sharing of foreign rights in the Premier League.”