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If the clubs were not prepared for lockdown, the TV companies certainly were

by Tony Attwood

It is quite clear that the Premier League and its clubs had no contingency plan for the interruption of the League which would result in matches not being completed by their due date.

But it turns out that the TV companies were not quite so dumb, and have long since included in their contracts various payback clauses for not completing matches, not completing them on time, and not completing them in stadia filled with fans.

Yet the huge dents in the clubs’ finances that will follow the lockdown could have been largely avoided even at the last moment if the League had taken seriously the option of playing out the remaining games on the island of Cyprus.

It as known from very early on that Cyrpus was a haven from the virus with only 17 covid related deaths all told, mostly involving people with existing serious medical conditions.

But no, the League had to go its own way, have its own wrangling and arguing, and the result is now facing a payment of £330m to broadcasters for late delivery of matches.   And that is assuming all the games are actually completed.

There is a further £36m due if the season is completed after 16 July.  And after that a sliding scale of extra payments depending on dates on which matches are played.

And as for not completing the games at all, the cost is off the charts at £750m.

Now we know that a lot of clubs have already spent all of this season’s television money – and in a world where TV money is guaranteed, that is to a certain degree reasonable.   Players who were to be bought this summer will have their transfer fees paid over the next four years, with the first payment being made out of the first tranche of TV money due at the start of the season.

That first round of money is just over £3bn, while averaging out at £150m per club.  If the clubs dispute the payment of the refunds for not completing the season, then the TV companies will withhold what is due from the £3bn.  If in response the clubs were to stop the TV deal, they might get another one, but it is unlikely that any major player will want to step into this mire, first because there would be no guarantee who would win the subsequent court cases, and indeed no guarantee that anyone else would want to deal with the League – at least not at that price.

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But according to the Mail the Premier League clubs will fight the fines in the courts which means the case could go on for years.   Indeed the Daily Mail in a report has said that negotiators from the League have begun to sketch out plans which lump together the fines for this season and the next TV deal, so that there would be no fines payable now, but the TV companies would accept more money in the coming seasons.

As part of this re-arrangement, there are also reports circulating that with most Premier League games sold out the clubs are ready to ditch the rather old fashioned notion of not having Saturday 3pm games on TV.

This restriction has been written into the rules from the start of live TV games, and is there in part to try and protect clubs from the lower leagues who fear they might lose their supporters to television if there was direct competition.

But such evidence as there suggests that those who go to watch clubs outside the Premier: League value their clubs and would not be tempted away from the ground in order to watch teams with whom they have no affection or relationship playing on a Saturday afternoon.

The agreement with the TV stations prohibits the screening of all games on Saturday at 3pm – not just English matches – and there is a fear that if the Premier League clubs don’t come up with a suitable recompense for not playing the games as agreed, the TV stations will insist on this rule going.

In such negotiations, it must be understood that the TV stations hold the cards.  As noted, the only other possible bidder is Amazon, who is, of course, the company benefiting enormously from the lockdown.

Against this, Google, Facebook and Netflix (all of whom are making huge profits during the time of lockdown), are all thought to be interested in following Amazon’s lead.

There is one other fear for the Premier League.  It’s deal costs TV companies more than any other football deal in the world.  But who is to say that viewers worldwide might not get a greater taste for German football, now that is all that is available?  That would reduce the value of the English games and enhance the value of the German league.

 

 

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