Soccer Extreme : BSkyB strengthen grip on Premier League football in £1.8bn TV deal. The resolution of the Premier League's domestic television rights negotiations will have been greeted with more relief than delight across the Premier League.
Dominant: Sky Sports has regained the Monday Premier League match from Setanta Photo: PA
Club chairmen and the players upon whom they lavish the majority of the game's income have become used to eye-popping rises in broadcast revenue, but with a global financial downturn in full swing and the recession affecting their fans, expectations for the latest trip to the broadcast well were leavened with realism.
By securing an £80million increase on the last deal – £1.782billion against £1.702billion for the 2007-10 rights
– Premier League chief executive Richard Scudamore has bucked the market and again delivered for his clubs.
"We are clearly pleased at the outcome and relieved," he said.
"These are not necessarily the best economic times [in which] we would be doing this. I don't know that anyone is recession-proof at all, but television audiences are holding up through the recession. No industry is immune but I think the clubs are well placed to manage that and the broadcasters are well placed to manage that."
The recession may yet cause some clubs to re-evaluate elements of their businesses, with attendances and corporate income likely to come under pressure, but television revenue, their primary source of income, will remain stable.
Under the redistribution model that the League operates 50 per cent of the domestic television income, which amounts to £1.955billion when the £173million the BBC paid for Match of the Day rights last week is added, is distributed evenly.
That will guarantee each club £49million over three years, with a further 25 per cent distributed according to TV appearances and the remaining share distributed in prize money. With overseas rights likely to match the current £650million, that will increase.
The rights deal that was awarded yesterday do not begin for 18 months and will take the League up to 2013, by which time, according to most forecasts, the recession should be a historical fact.
More importantly it will cover the long-term commitments to players who are the primary recipients of the TV money, preventing the nightmare scenario of wages for the very best-paid players outstripping revenue. Even modest players will benefit from the deal however. The average wage in the top division is £1.1million and yesterday's deal will ensure it remains above seven figures.
In contrast to the last round of rights when revenue leapt from £1.024billion to £1.7billion, securing even a modest increase has fully tested the market's commitment to the Premier League product.
Scudamore's task was helped by the entry of ESPN, the Disney-owned channel who have been hinting at a major bid for Premier League rights for a year. With Sky and Setanta, the existing rights holders certain to bid for a product that is central to their businesses, it ensured a competitive market.
The first round of bidding, which closed on Tuesday, saw Sky assert their dominance, securing the four most attractive packages. The second round saw them add a fifth package, taking their total spending to £1.623billion for 115 games a season. Setanta picked up the final package for £159 million, a significant reduction on the pro-rata price they paid in 2006 for two packages at £392million.
They appear to have benefited from a calculated gamble that by focusing on a single package of Saturday evening matches they may help retain subscribers.
Scudamore said he had confidence that Setanta would adjust their business model to cope with the loss of a package. "They are a long-term player, not just an 18-month part of the Premier League,'' he said.
As well as clubs, players and broadcasters there will be other winners from yesterday's deal, with grass-roots projects, the Football League and other football bodies set to receive more than £120million from the proceeds.
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