Listen to this article
The announcement that British Sky Broadcasting will pay about $800m a season for the right to broadcast 92 English Premier League soccer games will have raised eyebrows among owners of National Football League teams in the US.
BSkyB is paying significantly more than US broadcasters CBS or Fox, whose NFL conference packages – the American Football Conference and National Football Conference respectively – give them the right to show more games to American viewers (about 106 each) than BSkyB can show to its British subscribers.
The growth of Premiership broadcasting rights has been spectacular. When it was founded in 1992, the live rights were sold for £49m a season. The new contracts with BSkyB and Setanta – which has the right to show 46 games – are worth £567m ($1.05bn) a season, a 70 per cent increase over the previous deal.
There is no soccer league in the world that can generate as much income from broadcasting rights. It is more than the National Basketball Association makes from selling its rights and about as much as Major League Baseball generates from the sale of television rights in the US, once all the local broadcasting contracts are included.
Only NFL rights remain worth more in aggregate – once the Sunday night and Monday night contracts and the satellite TV Sunday Ticket are added – yielding a total of $3.8bn a season. But this is divided among 32 teams, rather than the Premier League’s 20.
Moreover, when one considers that there are nearly five times as many American TV households, the success of the Premier League is all the more striking.
For the past 20 years the NFL has been the world’s most lucrative sports league. The owners have achieved this by single-mindedly restructuring their game to maximise its attractiveness to their biggest customer, television. This strategy involved two main elements.
First, the competitive balance pledge – “On any given Sunday any team in our league can beat any other team” – made by commissioner Pete Rozelle in the 1960s has been rigorously observed through a range of competitive restraints, from revenue sharing to salary caps. Second, at every
turn the rules of the game have been altered to create the right atmosphere for broadcasters.
The NFL might therefore be puzzled by what it found if looking into the success of the Premier League.
For most of the Premier League’s existence there has been concern over competitive imbalance. First it
was the Manchester United dynasty, which won eight out of the first 11 titles
contested. More recently
the Russian billionaire Roman Abramovich has bought himself two consecutive titles at Chelsea by investing upwards of $750m on players.
Soccer has always been an “unequal” sport but while there is evidence of increasing imbalance, there is no sign that broadcasters are losing their appetite for
Even more striking is the attitude of Premier League clubs to broadcasters. Far from embracing the source of their economic power and bending to its needs, the owners have consistently demonstrated suspicion and sometimes downright hostility to the TV cameras.
The main concession to TV has been the scheduling of games at different times over the weekend to optimise audiences. But there are no extra breaks or rule changes to facilitate extra advertising. And only 138 of the 380 games played each season can be shown live.
So tightly have they controlled broadcast access that the antitrust authorities have twice felt compelled to intervene. In both cases, the Premier League was charged with operating a cartel and invited to relax the rules that prevent clubs selling their own rights, or at least making more games available for broadcast.
For most of last year
the European Commission fought a battle with the
Premier League to persuade clubs to make what few games they are willing to sell available to more than one broadcaster. Until now, only BSkyB has ever shown live PL games.
Faced with a European Commission demand that no more than 50 per cent of the matches should be sold to any one broadcaster, Richard Scudamore, the league’s chief executive, said this was “an intervention in the market that could lead to an artificial fall in revenues”.
In the end, the league reluctantly agreed to a rule that would not allow any one broadcaster to control more than 115 of the 138 live games sold. Had it not been for the competition authority intervention, the league would have sold its games exclusively to BSkyB and, presumably, have earned little more than previously.
The story of how a competition authority taught a cartel how to maximise revenues will make a good case study for business schools. Meanwhile, you have to wonder, how much money the Premier League could make if it really tried to
Stefan Szymanski’s book ‘National Pastime: How Americans Play Baseball and the Rest of the World Plays Soccer’ (with Andrew Zimbalist) appears next month
Get alerts on Sport when a new story is published