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The details of how the crash in English football will happen, and when it will happen.

By Tony Attwood

The chief executive of BT has said that the endless price rises for the cost of TV sports rights must come to an end, and he has suggested that the place that this decline should begin is with the Champions League – for which TV bidding has just opened.

It is a bit of a bizarre statement given that it was BT’s bidding which put the cost of Premier League matches up by 70% in the last couple of rounds of Premier League bidding for live games, but logic and TV bidding for football have never sat side by side.

But as always with such statements, what was most interesting was what BT’s top man did not say.  He did not, for example mention the dramatic decline in ratings for football on TV that has been found this season.

Some figures have suggested that some of BT Sport’s Champions League figures have been down by as much as 40%. Curiously a similar sort of decline is also being seen in the USA for their major sports coverage.

There are always explanations and excuses, as everyone tries to work out if what has been seen is short term or long term.  Seasonal factors, one‑off issues… they are all cited.  The weather, the rise and small of teams with smaller world wide fan bases, the relegation of Newcastle whose games traditionally get a decent audience… it goes on and on.

But the point is also that getting streams from non-legit sources has become easier and easier and so the question of whether one wants to pay a subscription for stuff you can get for free is becoming more central.

And let us just assume for a minute that the number of people watching on Sky and BT goes down, for whatever the reason.  And maybe the number of people watching around the world goes down too.  What then?

Well, first the broadcasters will offer far less money for the rights for matches.   That will mean, quite simply, the money coming into the clubs each year takes a huge dip.  The stadia will still be full, so that income stream will continue, and the oil and gas exploiters who fund clubs such as Manchester City and Chelsea will still be there.   But one revenue stream will have got a lot smaller.

Several things will then happen.  First, Financial Fair Play will suddenly become a factor again because although owners can make up the shortfall, that income will not be counted as earned income as the money from media rights is.  So the clubs will have to reign in their spending.

Second a lot of the smaller clubs, for whom the media rights is a major part of their income, will suddenly find their finances screwed.

Take Burnley for example.  This season they will earn about £170 million from media rights, which give them an income greater than Ajax, and most of the clubs in La Liga, the Bundesliga and Serie A.  In short, in a trice, Burnley have become one of the 30 richest across the continent.

Now Burnley have been clever thus far, in that they have used the money earned of late to clear all their debts.  But it is also a fact that they are guaranteed this money each year they are in the Premier League, and so the temptation is there to spend this money and try and stay in the Premier League.  They, like everyone, are spending it on transfer fees, and on salaries.

Although, because it is simplistic for the media to do this, most of the “debate” (I use the word lightly and not in its dictionary definition) about football is about spending money on transfers, much of the money spent on players comes from salaries.   J. Vardy, a player at Leicester, for example gets around £4 a year.   Mesut Ozil is reckoned to be on £7 million a year.

Now these players are going to be on these salaries, even if the money from Sky and BT plus the overseas rights, collapses.  Worse, because no one will have much spare cash any more, if the amount paid for TV games goes right down, the re-sale value of the players will collapse.  A player who cost £30m and who is still playing at the same level, might be worth just £10m.

Worse still, moving on players will be hard.  Consider a player who is getting £5m a year at the moment when TV deals collapse.   The club want to move the player on to reduce their cost base, but suddenly find they can’t.  The player won’t want to move to accept a lower salary.  The middle ranking clubs won’t be able to afford the top salary now the broadcast money has gone.

All of which means the player refuses to accept a transfer which would entail him getting a lower salary, as he is perfectly entitled to do.  No one wants to buy him, so his contract runs down.  At the end of the contract the player walks away on a free.  This means that his salary can probably be maintained at his next club because he is not costing anything in a transfer fee (so the money set aside for the transfer just moves into his salary).

The net result of all this is that clubs sitting on players valued at maybe £30m today, and with salaries of £5 million a year will find that ultimately they can recoup none of that transfer money, while the players, by moving on a free, can keep their salaries high.

Suddenly the whole transfer market as we know it, collapses.   Smaller clubs that were dependent on the fire sale of a few players if time got tough, find they can’t sell the players, and basically run out of money.

Will it happen?  Maybe, maybe not, but it shows what a knife edge football finance is based on.  For an industry to get itself in the position where its whole financial future is dependent on another unrelated industry and a rapidly evolving technology over which it has no control is bizarre to say the least.

The only survivors will be the clubs that have a habit of developing their own players and those with good reserves which they have not thrown around during the “spend some ****ing money” years.


Arsenal History Books on Kindle

The novel “Making the Arsenal” by Tony Attwood which describes the events of 1910, which created the modern Arsenal FC, is now available for the first time on Kindle.  Full details are here.

Also available on Kindle, “Woolwich Arsenal: the club that changed football” the only comprehensive history of the rise of Arsenal as a league club, and the attempts to destroy the club, from within and without.   For full details please see here.


 

The latest from the Arsenal History Society

We are currently 90% of the way through the most detailed review of Arsenal in the 1930s (the era that made Arsenal into one of the greatest teams) ever written.   The latest articles are

The Arsenal History Society publishes numerous series of articles exploring different aspects of Arsenal’s history.   You can find an index to all the series to date on the Society’s web site

 

 

 

 

21 comments to The details of how the crash in English football will happen, and when it will happen.

  • Nitram

    I think there are many different reasons behind why individuals are not watching so much football on TV.

    I think one of them is simply that the sheer amount of football available has been for some time at saturation point.

    On that basis alone it was just a matter of time before people just stopped watching, simply because they are getting bored with it.

    But I can only really speak for myself, and for me it is the shit that we get from both the media and the AAA, allied to the cheating B******s in black, that has finally done for me.

    I already choose not to listen to talk radio because of it’s relentless anti Arsenal dialogue.

    I now choose not to listen to any of the pre and post match output from SKY or BT due to a similar relentlessly anti Arsenal stance.

    Soccer Saturday has been a volume free zone for some time.

    The Sunday Supplement went years ago.

    Goals on Sunday never has a good word to say about us.

    This means for a vast majority of the time, the only use I get our of my ridiculously expensive sports packages is to watch our matches with the sound turned down.

    Yet I pay an absolute fortune for the privilege.

    It’s got to the point where I cant get to watch our game this week and I’m actually pleased.

    I read on here the other day that one of our regulars met Perry Groves at a match and asked him why he chooses to work at Talksport, along side the likes of Adrian Durham, when all he and his colleagues do is criticise Arsenal and Wenger, to the point of abuse.

    And you know what his answer was?

    Criticising Arsenal lights up the switch board.

    So that’s all right then Perry?

    I hand over my money and it means nothing to you?

    Balance?

    Impartiality?

    Honesty?

    Integrity?

    They all go out the window.

    None of that it seems means a thing to the likes of Perry Groves. Nope, just take the money and who cares what they say.

    Well f**k you Perry, that is just not good enough. You may have a clear conscience when you take there money but I think it stinks and I think you and any other ex gunner that feeds into this Arsenal hate fest should be ashamed of yourselves.

    Well that’s my reason for hoping it all comes tumbling down. I’m sure everyone else has there own reason.

  • Menace

    This may be a disaster for any clubs trying to repay loans for large expenditure (stadia, chicken nuggets & suchlike).

  • Andrew Crawshaw

    Off topic but Yaya Sonogo has just put our U23s one up against Spurs, would seem to be late in the first half but tweets are few and far between on the .com. Both Debuchy and Jenkinson also playing as over age players.

  • Andrew Crawshaw

    Video of the goal now on the .com twitter account. Not the best finish in the world and one the keeper really should have held but he didn’t and when they hit the back of the net they count. COYYG

  • Andrew Crawshaw

    Reiss Nelson made the points safe three minutes from time as the U23s win two nil to move up to third in the table.

  • ClockEndRider

    Nitram,
    My thoughts exactly. Spot on.

  • MickHazel

    You have nailed it Nitram.
    I must admit I do occasionally turn on Talksport but no longer for the Durham slot in the afternoon and always turn it off as soon as I hear the first anti Arsenal snide remark. I don’t usually have to wait long!
    Today I made an exception and tuned in to the Durham show just after 4pm.
    Durham and his pet monkey Darren Gough were talking about the declining interest in the Scottish league due to Celtics domination which made it all boring. Next thing someone phoned in purporting to be an Arsenal supporter who said that the Premier League had become boring as well and it was all the fault of Wenger not being capable of producing a team good enough to stop the likes of Chelsea running away with it. Unbelievable coming from an Arsenal fan.
    So there you have it. It’s all Wengers fault, nothing to do with anything else.

  • Norman14

    Nitram
    Spot on – that could have been me saying all of that.

    What is needed is a “General Strike” by football supporters across the land – see where the FA lay the blame for that!

  • ARSENAL 13

    I watched a part of a show the other day…..In some science channel. It was about the sports presentation of the Indian pro-kabaddi league. It has the second highest viewership in India…. Second only to cricket.

    In that a thing caught my attention….The presenter (may be the team chief of media broadcasting or something) said….Goal for him was to present the game in such a way that, every individual watching the game becomes an expert in the game….He thinks like a coach/manager….There are expert technical discussions in coffee tables across the country….That’s when he has succeeded….

    If I remember right, he was part of the football media team in, you guessed it right, England. English Premier League.

    Now, we have experts everywhere in football. Why would they want your shit experts….Media digs a big old grave for themselves……

  • Wengever

    Nitram,
    Your response reminds me of Wengers deep thought in his likening managing a team to a priesthood. His commitment goes beyond coaching skills and embraces the opportunity of ‘improving the man,’ both himself and those he works with. This value I believe is also central in all who believe and defend Arsenal. Belief of our own constant self improvement as human beings is a value that easily finds an affiliation with all that Arsenal stands for in the club. It is a part of demanding FairPlay and justice both o and off the field. In the perversely materialistic world we live in and which the media champions, the value of self-improvement as a human being, not only carries very little currency but grates very much against the grain. I believe this is one considerable factor that fires up the anti-Wenger crusade.

  • Tommo

    Armageddon is years away. And if\when it does happen, arsenal won’t be the only survivor simply because they have reserves to dip in to. The other top clubs won’t sit on their hands while the world collapses around them.

    The top clubs will reinvent the game. A breakaway european league possibly? And this will include arsenal. Sky and BT would fall over themselves fighting for that. Whatever happens, the big boys will be looking to keep the cash rolling in, and it will be at the expense of Burnley and the likes who will have to take a cut to keep the big clubs happy.

    Whatever money is flushing about in the game, the top boys will want. And that includes arsenal.

    And do you seriously think reserves will be used to finance daily operations? Not a chance! Season ticket prices would be raised first, justified to keep the top players. And then it will be belts tightened again, as we will be in another phase of austerity. The reserves will remain untouched, saved for a rainy day.

    Just my take on things…

  • nicky

    @Tony&Nitram,
    Rarely have I read such erudite and sobering views about the future of professional football in our land.
    The love of money in the beautiful game has resulted in football clubs becoming Big Business, players salaries becoming grossly inflated and transfer fees bordering on the obscene.
    The effect has largely fallen on the loyal fans where continually rising ticket prices, catering costs and the infamous never-ending issue of new home and away kits is a positive disgrace.
    The present situation is all due to postwar advertising, coupled with global commercial television and as both of you rightly forecast, this bubble will soon burst.
    It has to, because like all bubbles the end is inevitable.
    A return to sanity in the professional game cannot come soon enough.
    Sport for the masses should never become too costly in order to enjoy. 😉

  • Andy Mack

    I can’t remember if the latest PL TV deal is 4 or 5 years but it’s some way off, and if the ratings are still so dramatically down in year 3 then the PL will have to take a serious look at why, with the intention of reversing that trend.
    Even if they only reverse it partially, it’s unlikely the TV income for the next deal will drop that much, although the TV companies may insist on even greater control over the fixtures list.
    As we all regrettably know, prices rarely come down and if they do then it’s only a temporary blip. So although it’s very likely clubs won’t get a big rise in the next deal, equally they shouldn’t have a big drop in it either.

    As for any future deficit in the financial daily operations, where the money to cover that came from would rather depends on the numbers involved.

    As for a ‘European Super League’, I can’t see it happening.
    I know it’s been discussed many times but as far as I can see Uefa and Fifa have too much control over football to let a new league be set up and they are more than happy raking in their obscene income from the present system.
    They’d make enemies of all the affected national leagues if they were involved in a new Euro league and if it was set up against them then they’d ban any players from their national teams in any Uefa/Fifa tournament. So Alexis and others that love playing for their nation would have problems, although some would just follow the money and flip a finger at their national team…
    And a new organisation replacing Fifa/Uefa would just take too much organisation for the self-serving clubs to be involved in, even though it would be the best option.
    In my opinion.

  • Brickfields Gunners

    As one who watches only the Arsenal games on tv , although nearly all the games are televised , the collapse of the sports tv companies would be most welcome. I have had enough of the crap that put out as infotainment , daily bombarding me with moronic opinions from so called experts . Thank god I have a thick head and fall asleep easily !

    As far as I’m concerned , they could start their austerity measures by sacking the lot of them and replacing the shows , with old videos and highlights footage with out the prattle. Music yes ,crowd cheering -yes. But no more smart assed commentary.

    Wouldn’t shed a tear as these ex players types pan handle outside stadiums or charge fees for selfies with fans, and charge for autographs . Or being bought free beers at pubs as they entertain the crowd. Or performing in circuses or at fun fairs and fund raisers !

    I would rather pay the club directly to watch our games . Stan , make it happen ! Just imagine millions of loyal, hard core fans outside of England helping the club coffers ticking over.

  • Brickfields Gunners

    Two things that are very difficult to achieve:

    1. To plant your ideas in someone else’s head.
    2. To put someone else’s money in your own pocket.

    The one who succeeds in the first one is called a TEACHER.
    And the second is called a BUSINESSMAN.

    The one who succeeds in both is called a WIFE.

  • Mike T

    Interesting article. Don’t agree with all of it( no surprise there ) but none the less well thought out
    BT dug a hole for themselves when they outbid both ITV and indeed Sky for the CL the fact that Sky didn’t go the extra mile in the bidding process says a lot.
    There is a series running on Sky( on History)at the moment about and if you can I suggest you watch it. It is Arsenal centric and early in the series it talks about how Sky became involved for initially was thought that the live games were going to be shared between Sky and ITV but when ITV played hardball Sky , who were losing circa £10 million a year , bid for and were granted the contract.
    Fast forward x number of years and Sky, whose flagship bundle is Sky Sports, are making £ 1.1 billion profit and in the last reported period they report another 177,000 subscribers.
    I’m sure we all know someone with a Kodi stick and yes there are are now significant numbers of illegal streams but I recently read that the main internet providers in the UK are now directing their attention to those that access illegal pay to view material . Initaly their apprporach is going to be a warning letter but I read a comment that should they detect continued activity their approach will be cranked up the suggestion being that they withdraw your internet access. It’s interesting that the main providers in the uk are Sky and BT
    In the article I mention the comments section was interesting people talked about using VPN and yes that may well work but there is it seems very expensive technology is available to by pass the security that a VPN could provide and with the resources available to Sky alone I suspect they will do everything they can not necessarily to stop illegal streams but the implication to me was clear you act illegally then we might not want you as a customer.
    Football is now so dependent on TV money any reduction would be create huge issues for take away the huge audiences then following the TV money going south would be the huge commercial income

  • para

    “J. Vardy, a player at Leicester, for example gets around £4 🙂 a year.”

  • Norman14

    Sky Sports need to be very careful today. I don’t pay 40 quid a month to watch Alexis stropping it out on the bench.
    But I bet that’s where their attention will be – and if I see him more than twice, I’m sending a complaint!
    The money is for football, not for lessons in emotional turmoil!

  • Norman14

    Oooops – BT as well – @ 27 quid a month – same issue 🙁

  • Mike T

    So know we know the comments from BT we’re no more than an attempt to stop others for the new deal sees an increase from £897 million to £1.2 billion
    Clearly to is struggling!

  • John

    Well so much for collapsing viewing figures and rubbish moaning from the BT chief executive!! BT just paid 32% more for champions league than last time – roll on the gravy train.

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