Football Broadcasters want their cash back but the clubs don’t have it.

by Tony Attwood

Premier League executives have been told it will cost them £762 million in lost broadcast revenue if the 2019-20 season fails to finish due to the coronavirus, according to The Athletic.

This sum is calculated to be the amount paid by the TV companies that contract to show games, with the money involved having been paid for the full season (it being paid in two tranches, the second having been paid last month – February.)

Obviously I have not seen the contract between the TV companies and the Premier League but I would imagine it fairly clearly states that the agreement is for the games to be played at times convenient to the TV channels, and thus the PL, by not playing them, will be in breach of contract and liable to damages.   The deal will include not just League games but also European matches and international games.

The losses to the broadcasters come in four different ways and this is what is screwing up the whole future of football in the Premier League.  Although you may not know this, because it rather looks as if the contractual relationships between the broadcasters and the Premier League includes an agreement to the effect that the broadcasters will not criticise the Premier League.

But deal or no deal the realities are…

First, many subscribers are now cancelling their subscriptions and so that revenue is being lost hand over fist.

Second, advertisers are often guaranteed a certain number of views of their advertisements, and these, of course, are not being delivered.  If they are not guaranteed a set number of views then they will be guaranteed a certain position in a particular programme – such as half time in a PL game involving one of the traditional top six clubs and again that is not being delivered as per contract.  Contracts are broken, compensation is required.  Big time.

Third, the TV companies pad out their coverage with a number of other programmes previewing and reviewing the games, and again these are not being broadcast and thus are the situation is again losing the channels further sums.

Finally, there is the sponsorship income.   Both the clubs and the sports channels have arrangements with sponsors guaranteeing exposure of the sponsor’s name and logo in certain ways at each match.  They want their money back too.

Meanwhile, there is the continuing uncertainty surrounding the games, whether they will actually be played or whether the league will simply be abandoned.  Although the discussions on programmes with three or four so-called “experts” parading their ignorance can happen at any time, even this trivial entertainment needs matches to be played to keep the excitement in football and hence the channel, running.

The clubs and the League are however in no position to pay Sky and BT back, simply because they are not receiving any money from playing the matches – it all goes on wages and transfer fees (which are paid over four years).  But the TV operators are in no mind to hold fire with their demands because they are legally owed the money, and fear delays could mean clubs going bust.  And once a limited company goes down, then you can whistle for your money.  Payment is normally around 1p or 2p for every £1 owed.

Some clubs are determined to get games played behind doors so they don’t lose the broadcast money, such is their vulnerable financial position.  To do this they can lay players off, leaving the players free to go and find someone else to play for.  Probably a German club where the media, rather than making up transfer stories, report how the fans are raising money for those who lose out because of the cancellations.

Just to show how huge the problem is for some teams take a look at this simple chart…

The figures below are based on the total revenue for clubs as shown in their 2018/19 accounts.  Some clubs’ figures were not available but most of the top income clubs have declared their figures for the last reported season by now so I’ve worked from those.

The aim is to see what happens to club income once the matchday receipts and TV money are removed – which is exactly what is happening at the moment.

Club Total revenue Matchday plus TV % of total income
What’s left
Manchester United £627m 55% £282.15m
Manchester City £538m 57% £231.34m
Liverpool £533m 65% £186.55m
Tottenham Hotspur £459m 71% £133.11m
Chelsea £452m 59% £185.32m
Arsenal £393m 72% £110.04m
West Ham United £191m 81% £36.29m
Everton £188m 78% £41.36m
Wolverhampton Wand £172m 84% £27.52m

The clubs with the lowest dependency on match day and TV for income are the biggest ones, who can most readily afford to take the hit.

But do take a look at just how small are the revenues is of West Ham, Everton, and Wolverhampton once the other money is withdrawn.  And then consider Wolverhampton’s borrowing, the club having already borrowed against next season’s TV revenue.  They could be in real trouble.

At the other extreme, Paris St Germain have 57% of their income from non-match and TV revenues.  Bayern Munich have 54%, Real Madrid 47%, Barcelona 46%.  Arsenal are at 28%, which leaves them horribly vulnerable to the cancellation of matches as we have now.  True the owner is a billionaire, but he bought the club to make money, not to invest money in it.  Besides, he will have growing issues with his other sports franchises.

With pubs, clubs and restaurants closed there is absolutely no chance that the UK government will allow football matches to resume as things stand.  Plus deaths from the virus are still rising – we are nowhere near the plateau yet.  So the government will certainly need to re-open the pubs first and that is simply not going to happen at the moment.  Nor in the near future.

Which means no money for the clubs and no money for the broadcasters.

The only question is, when will the media admit it?

5 Replies to “Football Broadcasters want their cash back but the clubs don’t have it.”

  1. Just funny how we always come back to a top 6….that does not change.
    what might be intresting to have is the amounts the clubs have to pay back on debt.
    Because this will have an impact on the available money.
    This may change the top 6.

  2. It is certainly viewing when I log in Joe. It may be an overload on the site, or a temporary problem when you logged in, but there is indeed an article there. I will call a few other people away from my area and see if they can see the article, just to check.

  3. Based on my knowledge of what befell the late, great Serie A: this was bound to happen eventually. This unprecedented period of time we are now living in was not how I thought it would come about. Alas, the game of football we all knew and loved died long before this period: this may just finish it off and I for one, couldn’t be more happier for maybe all the leaches and parasites will crawl back under the rock they came from.

  4. Untold, as usual, reporting the facts generally ignored by the rest of the media. Sobering, Tony, thank you.

    Note to Joe: try accessing the internet through a different access. The page was blank for me using Firefox so I came in through Microsoft Edge. I think Chrome will work as well.

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