Liverpool Seek Break From Premier League TV Deal

By: Noel | October 11th, 2011

The Premier League approaches television rights negotiations as a collective, seeking the best price for all the leauge’s clubs and then sharing the resulting revenue, for the most part, equally. And late on Tuesday, it became clear that Liverpool managing director Ian Ayre intended to lead a fight to destroy that system.

Currently, there are bonuses to be had based on finishing position, while some of the money is set aside for parachute payments that go out to demoted clubs at the end of the season in an attempt to ease their fall into the less lucrative leagues below. But on the whole, the same money will be handed out to Blackburn and Newcastle and Swansea this season as is handed out to Chelsea and Arsenal and Manchester United. The argument in favour of such an approach is, of course, that this helps to maintain a competitive balance in the league. That without it there would be a real risk of England’s top flight becoming rather like Spain’s, where Barcelona and Madrid are free to reap the rewards of their individually negotiated television deals while all the have-nots get left out in the cold. Still, some of the more commercially attractive clubs, most of whom have earned that status over countless decades, have at times felt justifiably incensed at being made to share money they see as being the primary earners of.

What is absolutely certain is that, with the greatest of respect to our colleagues in the Premier League, but if you’re a Bolton fan in Bolton, then you subscribe to Sky because you want to watch Bolton. Everyone gets that. Likewise, if you’re a Liverpool fan from Liverpool, you subscribe. But if you’re in Kuala Lumpur there isn’t anyone subscribing to Astro or ESPN to watch Bolton, or if they are it’s a very small number. Whereas the large majority are subscribing because they want to watch Liverpool, Manchester United, Chelsea, or Arsenal.

The counter argument in favour of parity, with a desire to avoid becoming a one or two team league, does resonate. Sport, after all, is about competition, and a league completely devoid of such would seem destined to become stale. Yet the Premier League has been arguably less competitive in recent seasons than La Liga, with Manchester United almost guaranteed to be title favourites each and every year while Chelsea and now Manchester City lurk below them, looking to spring an “upset” funded by their oil billionaire sugar daddies.

The reality is that it’s no longer reasonable to expect even clubs like Liverpool or Arsenal to be serious title challenges, while the days when clubs like Blackburn or Newcastle could legitimately hope to take a run at the title are long, long gone. For all the talk of Spain being a wasteland after the top two, it would hardly be less of a surprise for Valencia to take the Premiera crown this season than it would be for Arsenal to win the Premier League.

Clearly, the current system is broken, and for all the talk of England being home to the best, most competitive top league in the world, there isn’t much in the final standings year after year to back up that talk. There really hasn’t been for most of the past decade. And things hardly seem to be getting better, with Manchester United untouchable at the top of the heap while the only two sides that can come close to matching them do so by flaunting UEFA’s financial fair play rules even as they are finally being put into place.

Is it right that the international rights are shared equally between all the clubs? Some people will say: ‘Well you’ve got to all be in it to make it happen.’ But isn’t it really about where the revenue is coming from, which is the broadcaster, and isn’t it really about who people want to watch on that channel? We know it is us. And others. At some point we definitely feel there has to be some rebalance on that, because what we are actually doing is disadvantaging ourselves against other big European clubs.

And that final point is where things begin to get tricky: Other big European clubs. After all, any club that aspires to the top of English football must also aspire to reach the top in European competition. Now, that almost inevitably means going up against continental powers that have access to much larger sums of money due to their ability to negotiate international television rights separately from their league partners.

As enjoyable as it may be from a Liverpool perspective to see Manchester United picked apart by Barcelona, there’s no escaping that were Liverpool in the same position they would almost certainly now be similarly overwhelmed. And it’s unescapable that, however much Barcelona owes their success to their La Masia academy, they also owe it to their massive financial clout—and that that clout owes a great deal to their individually negotiated television rights, something no English club currently has access to.

It’s hard to avoid the reality that, as broken as the current system is, allowing clubs to negotiate their own rights would only make things worse domestically in the long run. Yet it’s just as hard to avoid that in the current European reality, it may have already become next to impossible for English clubs to compete with the richest continental sides at the highest level, and that as things stand this situation is one that will only get worse.

If Real Madrid or Barcelona or other big European clubs have the opportunity to truly realise their international media value potential, where does that leave Liverpool and Manchester United? We’ll just share ours because we’ll all be nice to each other? The whole phenomenon of the Premier League could be threatened. If they just get bigger and bigger and they generate more and more, then all the players will start drifting that way and will the Premier League bubble burst because we are sticking to this equal-sharing model? It’s a real debate that has to happen.

It will be easy for many to simply point to Liverpool in the coming days and accuse them of greed, and there may even be some truth to that. But the situation isn’t nearly so straight forward once one considers the reality beyond the Premier League—or even when one honestly reflects on the reality of a domestic league that is far less competitive than its champions would like people to believe.

In any case, Ian Ayre’s push will amount to nothing: It would require 14 teams to agree in order to pass such a radical change, and this change would only benefit between three and five clubs—even Manchester City and Chelsea might benefit very little, if at all, from it. The club, of course, knows this, and so one is left to consider what their true motivation must be for floating an idea that seems certain to fail while potentially angering half the league.

There is of course the most pedestrian option: Perhaps they are seeking simply to be given a larger cut of revenue and have stepped up their bluster with the full intent of settling for something much less revolutionary in the end. More interesting, though, is the idea that Liverpool might intend this as a kind of warning shot for the FA and UEFA. In recent years, there has been a constant background discussion over the possibility of a 16 to 20 team European super league splitting off from the oversight of Europe’s football associations. To date, there have always been legitimate reasons for the idea never going very far, from a loss of traditional rivalries to the logistics of travel and the likely toll on attendance, as, once the novelty wore off, first traveling support and then perhaps even home support would seem destined to plummet. Yet any time the region’s biggest clubs find themselves at odds with UEFA and their local FAs, it’s an idea that inevitably bubbles to the surface, a constant threat in case life in the current system becomes unbearable, financially or otherwise.

With Liverpool’s new owners making a big deal of the need for financial fair play to be strictly enforced even while Manchester City and Chelsea appear to be flaunting it as the system begins its implementation, and with big clubs on the continent left to function in systems that give them inherent advantages over their English counterparts, it could be that this is Liverpool’s turn to level their own “or else” threat: Enforce financial fair play as it was intended or we will do everything we can to make life miserable for you—for the English FA in the short term, and maybe even for UEFA down the line by way of a European super league as a likely inevitable end should England’s top clubs find themselves wholly separated from their domestic competitors.

Or perhaps, of course, Liverpool is being entirely honest and it’s nothing but a grab for the ability to negotiate their own television rights. No matter the case, the coming showdown over this major financial issue seems certain to lead to some interesting times for the club—and perhaps even all of European football—going forward.

Some Related Liverpool Posts:

Category: Premier League, Team News

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RobustRat1972

I personally thought that this idea would kill some clubs but after recalling the situation a year ago,the same some was wishing we will be declared bankrupt.even at that difficult times we never gave up and in came FSG and their team had done brilliantly ever since. Some clubs dont even want to respect us as a major force iyn not just Europe but the world as well.To the extend certain players labelling us as unatractive and no
hope.Certain clubs even openly stjust a small erdwclub.So,why are they against the idea of us splitting.The answer is very simple,the whole tv rights business is riding pillion on our fan base.The moment Ian spoke about this everyone felt as if they sat on a needle. Just the mere idea of LFC havingtheir own tv rights revenue has sent shockwave and sleepless nights to rivals who thought Liverpool is just a has been.Some calling LFC greedy.My answer is ;Yes Sir,We Are!We deserve to be for our share.Some clubs have bigger stadiums and their ticket price is nearly twice as ours. No one debated about it.No one even dared to say these clubs being greedy.Did they bothered to think about the travelling not so fortunate supporters?For them,there is no time for thinking when it comes to income.But LFC and FSG guys are only wanted to own what is rightfully ours.So, why all the big fusss?Now,all the debate and accusations on LFC, FSG and Mr.Ian proves OBVIOUSLY,CLEARLY highlighted the fact that they depend largely (and not solely)on Liverpools popularity.Simple as that,and dont have to admit to it because your the frenzy itself says it loudly!
CharlieAdamsBuckteeth

Sure we're all Liverpool homers, but aren't we soccer homers as well? Yes, the top PL clubs would improve the quality of their players somewhat, but with the dropoff in money to everybody else, the quality of the league would suffer massively. I desperately want Liverpool to win every match, but not by rigging the system so the other clubs don't have two feet to stand on. Who wants to turn Fulham into Blackburn and Blackburn into a Championship-quality side? Certainly Ian Ayre does, because it's his job to make money, but as a Liverpool fan and a soccer fan, that sounds terrible to me.
JPR

The Spanish TV contract is about 526 million pounds per year. Real's TV deal is $129 mil pounds and Barca's is 146 mil pounds. Those two clubs recieve 52% of the annual TV revenues. That system is completely morally bankrupt and pretty much guarantees that either Real or Barca will win the league.

The English TV contract for 2010 to 2013 is 3.2bn pounds, about 1.1bn pounds per year. Those revenues are currently split pretty equally (lets make it simple and pretty accurate) so that each of the 20 teams receives approx $55 mil pounds per year. (give or take based on league position +TV appearances).

The 3.2bn pounds over 3 years is split 1.8bn of domestic rights and 1.4bn of International rights. The contract for 2014 to 2017 is expected to increase about 1.4bn pounds for the international rights mostly attributable to the demand created by the 4 teams (United, Chelsea, Arsenal and Liverpool). If the additional annual international revenue of 466mil pounds was split 40% to those 4 teams (instead of 20%), the total revenue split would be 102 mil pounds per year to those 4 and 72 mil pounds to the other 16. This would translate to those 4 teams receiving 26% of the annual TV revenues instead of 20%.

Are the 16 teams in the league hurt so badly by only receiving 72 mil pounds per year while the 4 teams that created the increased international revenues receive 102 mil pounds per year? It's nothing like the Spanish model where the 16 teams are getting only 48% of the revenue. The 16 teams in the EPL would be rceiving 74% of the revenue instead of 80%.
JPR

The average of the 18 Spanish teams now receives 14 million pounds per year from TV rights. (526 - 129 - 146 = 248/18 = 14). No wonder they're all so pissed.
Latortillablanca

real and barca have not only created that chasm between them and the rest, but since they both survive on loans from santander, they played a huge hand in bankrupting spain... still though, who would rob the world of real and barca as we know them...
Andy

I guess Ian has a point. But it seems a lot like something that would be detrimental to the premier league, although as you pointed out the PL hasn't been as competitive as it's been made out to be for a long time. Surely though, when the lower half of the table are all struggling to compete against the big boys already, this would just make the situation worse.

I reckon we should just copy the Bundesliga model, because whatever they're doing, it's working. Constantly packed stadiums, exciting football, clubs actually being run profitably. Dortmund came out of nowhere last season and won the title, while Schalke and Bremen had a pretty ordinary season if I remember correctly, and I believe they BL has similar tv deal to the PL.

It's about giving the other clubs a fair go, and making the league more exciting, so I don't think an unfair distribution is the way to go.
RobustRat1972

I totally agree and support Mr.Ian and LFC on this. With the massive fan base and support around the globe, it will be impossible for other clubs to match the inflow of revenue generated by the tv rights LFC can attrack. The summer tour to Asia proved the kind of support LFC still have without winning a single EPL crown for over 20 years. The new management under FSG like somewhat awaken a slumbering giant and open the eyes of our rivals.This will allow us to compete with the likes of teams from LA LIGA. Of cause rivals will not agree and will criticise and debate about this.(when did they didn't if something good happen to LFC)! No one complained when Russian billionairs and middle east Sheiks splashed millions to buy an entire club of players.invading lower clubs without even bothering about existing rules and regulations.These people created a rift in salary gaps resulting in some given obscene amounts just to warm bench. All Ian trying to do here is improving our own club without effecting others. With the new stadium discussion going on,its only a matter of time Liverpool will rule not only in footballing but also in business world. If this thing goes through as suggested by Mr.Ian, there is no doubt it will give nightmares to some who arrogantly behaving like untouchables.
Ryan

Sounds kinda spiteful, like we are trying to pretend like we are a top 4 club still (we have to wait til the end of the season to see if we are, folks), thinking we deserve more money. But yes, no Bolton fans in Afghanistan. While on paper the premier league might not be very competitive, it's a no brainer that it is more interesting than La Liga. When the team in first place ties with the third place team and it's considered a crisis, you know the competition is pathetic(even if the competition did just get a kickass draw).

Got bored and found myself dabbling in the old old posts. check it out, good times: http://liverpool.theoffside.co...
ejbauer11

Thanks for the fair-minded post. I'm all for teams being able to negotiate individual deals, but some kind of revenue sharing should remain in place, w/ the money that's given to smaller market clubs being earmarked for investment in that team (so you don't have owners lining their own pockets w/ it).
Ynwa31

IF Liverpool negotiate our own rights we would INCREASE our share of international broadcast rights - we are HUGE in Asia (less so in America and Africa). This would enable us to COMPETE more effectively with Arsenal, Man City and Chelsea (who are less big internationally). Increasing revenues will also enable us to compete more effectively with Barcelona, Real Madrid (though clearly Barca would outplay us). The ONLY negative here is that negotiating own rights would mean Man U would get even more revenue WIDENING the gap versus Man U.

The owners' background is baseball which has a degree of revenue sharing BUT NOT EQUAL shares. The Yankees YES network is worth a fortune and even though the Yankees have more firepower the RedSox can compete, and this model is what Ian Ayre is moving to.
JPR

United have approx $100 million pounds more revenue than us. The increases are; matchday 60 mil., broadcast 20 mil., commercial 20 mil. We are closing the gap in commercial deals, and should be able to add 20 to 30 mil with 25,000 more stadium capacity.

That would put us on an EQUAL footing with United due to their now PERMANENT 50 mil of interest costs. And if the Glazers are not able to hammer the Singapore stock market with an inflated stock offering, the interest costs could be more like $80 mil per year. (Assuming the 250 million pounds of secret financing from that Delaware corp would have to be refinanced).
brother jon

more than his baseball experience (which is prolly no more than 10 years), this move smells of John Henry's financial markets background. you know, finding inefficiencies, market making, looking farther down the road, and such. generally not a fan of those types, but a real asshole would've jacked up ticket prices already.

and i think you might be surprised at pool's pull in the US (san francisco was swimming in LFC gear the morning after Istanbul), and Africa too (we've got a fair few African Redmen on this site alone).
JPR

It's nice to see that Kenny and Ian are so very happy to be leading this fight as we can plainly see in the picture. It only makes sense that the 4 teams that are driving the exponential increase in the international broadcast rights should receive a greater share of those revenues. And the fact that the international rights will soon be greater than the British domestic TV rights makes this an enormous issue. It's not really "hurting" the other teams, it's just logical that the teams creating these additional revenues should receive the greater share of them. The other teams in the EPL will still be receiving an equal share of the exisiting revenues, which is substantial. (Man City is not yet in this 4 team group but will soon be if they continue to be one of the top teams in the League, just like Chelsea only recently became a part of this group.)

It's probably unlikely that the EPL teams will agree to individually negotiated rights. This is just an argument being used to get the other teams to agree to a greater share of the international rights to the 4 teams generating that demand.

The argument that the EPL teams need these additional revenues to compete against the bigger European teams does not hold much validity. The team with the greatest revenues by far is Real Madrid. United, Chelsea, Arsenal, City and even Liverpool have been more than just competitive with Real and will continue to be. Barcelona have recently been in a class by themselves. But, this is created as much by their manager, style developed recently which dominates possession as well as quality players and exorbitant revenues. And Barca's players are mostly Spanish national team players who want to be in Spain. This runs in cycles, anyway. This year the CL winner could well be Bayern which has $100 million euros LESS revenue than Real and Barca. Or the CL winner could be United or City. It is true that $100 million Euros of additional revenue will give a team a competitive advantage in attracting certain world class palyers, but it will not allow them to "corner the market". United, Bayern, City, Chelsea, Arsenal, Liverpool etc. will always have their share of world class talent and $250 to $350 million euros of gross revenue is certainly enough to accomplish this.

The position Liverpool are taking for an increased share of the international broadcast rights is certainly the right one for the club and the right result for the league in principle. That revenue sharing model is fair to all of the teams in the League. It's really good to see as a Liverpool fan that we have some clued in owners who are smart enough to pick the right battles to fight.

Now if they can just get that Liverpool council to agree to have Anfield redeveloped which will be entirely funded by $150 to $200 million pounds from Standard Chartered or Adidas to APPEND their name to the stadium... Anfield - Standard Chartered Arena, I'll have almost everything I want. History of Anfield maintained, owners with the sole intention to build a world class team, and the revenues to accomplish it.

Let's go you Reds, time to kick some United ass.
Joel

It seems highly unlikely that Ayre thinks that he'd actually be able to get to individually negotiate broadcast rights now, say what you will about him, but he isn't an idiot. It seems much more likely that he's just looking to put the consideration on the table that English clubs can't both be nice to each other in regard to revenue sharing and be expected to compete financially with clubs that aren't subject to the same limitations. With the new broadcasting rights negotiation coming up, this might put pressure on the league and lead to a slightly more advantageous revenue sharing scheme for the big clubs. After all, it is the top few clubs who are the ones creating the vast, vast majority of demand for the broadcast rights in the first place.

Now I'm not advocating a free for all approach either, as some amount of revenue parity is needed between the top and bottom teams. In Spain, we just saw this issue come to a boil this summer with the player's strike as a result of clubs being unable to afford to pay wages. Smaller clubs need to take a gamble on paying bigger wages to better players on the hope that this will bring in higher revenues down the road. More often than not, this just results in everyone having to bump wages higher to compete with each other, while experiencing small gains in revenue, leading to the the clubs' cash flow drying up.

However, this also is happening in England under the current revenue sharing model. Championship and bottom-tier Premier League sides have to pay higher and higher wages to players to try and compete and get bigger shares of the revenue pie. No matter which method is used, the same problem arises- smaller clubs have to go beyond their means to try and break into a higher bracket, failure to do so results in the same issues with cash flow. How many bankruptcies have we seen in English football as of late?

Basically, we're just fighting over whether to subsidize less successful clubs X amount or Y amount and shrouding it with terms like 'fairness' and 'parity'. The reality is that some clubs will always have a bigger draw than other clubs and money is really the only way to ensure long-term success at a club. If you just replace 'money' with 'success' in terms of a revenue sharing scheme, is it really proper to say that Club A can only have X amount of success, then you have to start giving it to Club B because you can't be too good?

The reality is, no matter what you do, you're really just deciding whether you're going to use X or Y amount to subsidize less successful teams. Saying one number is better than the other isn't based on some moral ideal, it's just an arbitrary number decided by men in suits in a boardroom.

So, what do I think? It's important to maintain some amount of competition, because a completely free, unrestricted market will only serve to concentrate power in the few at the expense of the many. That being said, the other side of the coin is equally important, clubs should be able to benefit from their own successes and work. Maybe the best plan would be using both approaches: let clubs negotiate their own international broadcast rights, but require that a certain portion be put into a pot to be shared between the clubs. In the end though, I'm just sitting behind a keyboard in a t-shirt and jeans.
mardia

Let me preface this with saying I'm against the idea of Liverpool breaking away from the current PL TV deal. Noel is utterly right in pointing out the lack of parity in the league that already exists, and while there are times that the PL feels a lot like La Liga, it isn't. When Manchester United go to Stoke and only get a point, or City gets stuck in a 2-2 draw with Fulham, yes, it can be surprising, but it isn't the out and out shock that a similar result would have in La Liga. Also, and this is something nobody talks that much about, but the lack of parity puts a TON of pressure on the Madrid-Barca players. As Sid Lowe put it once, a draw for one of those clubs is now a loss, and a loss is now an out-and-out crisis.

Furthermore, with the news that United and Chelsea will not back Liverpool on this (it's been announced today in the Guardian) the odds of this happening decreased even more, and they were pretty damn minuscule to begin with.

However. I think Noel (and by extension, Ayre) has a really good point about the inability of English clubs to compete with the likes of Barcelona or Real Madrid. Yes, Barcelona are the best club in the world right now, and Man United always had a mountain to climb to try beating them in the CL final--but had Real Madrid made it to the final in place of Barcelona, I firmly believe the result would have been the same.

Like I said, I disagree with what Ayre's trying to do. It's unfortunate, however, that in the rush to condemn him--and, by extension, LFC--the media is ignoring the good points he did make about English clubs vs European clubs.
Justinsandhu80

At the end of the day business is business! If the likes of Man City and Chelsea are openly flaunting the Fair Play Rules. Liverpool are well in their rights to suggest these measures.

I personally am very happy that LFC have come out of the wilderness of their commercial doldrums. Instead of trying to play catch up with their rivals, as was the case in the past,they are taking the bull by the horns and trying to implement change. It seems the arrival of FSG on the scene has totally transformed the LFC model for the better. With every level of the club from the boardroom to the playing staff finally on the same page, pulling together to do whatever they can to make LFC great again.

I for one applaud Mr Ian Ayre...
Latortillablanca

i agree that this is an example of not only FSG's commercial prowess, but also of IA being good at his job, and being able to think outside the box in a way Rick Parry was utterly incapable of (not even gonna get into it with purslow), so well on to him. But, and noel does a good job picking up on this, its hard to gauge how much of this is smoke and mirrors, just looking to stir the waters, and how much is coming from an FSG ethos that may actually lead to some sort of ultimatum scenario...
Ynwa31

Purslow's only job was to sell Liverpool which he did and so that was successful, the fact that he was an idiot with players and "managing" Liverpool was I'm afraid collateral damage.
Latortillablanca

no doubt, history will remember him and ol' boy from RBS as the gents who brought us to FSG's doorstep, but hopefully it also remembers purslow's collateral damage included torres, meireles and almost reina...
Sandro

The premierleague is great as it is - but as a liverpool supporter I'd selfishly be happy for this to go through. The league's strength right now is that there it is so even, maybe not in terms of teams that can win the title, but there are 6 clubs going for Champions League, couple more for Europa and heaps in a very even and unpredictable relegation battle. I think even without this deal being pushed through Liverpool will still rise to the top under Kenny but the extra money would definitely make it easier.

Also wondering if anybody can clear up when Madrid/Barca negotiated their new TV deal because it only seems a couple of years ago that apparently the English clubs were dominating UEFA and had 4 outa the last 8 clubs in the comp every year. I don't really buy the threat that the English teams will fall so far behind the Spanish, just seems like a savy business strategy. These are smart men and they obviously wouldn't say something to piss off 3/4 of the league without a good reason. YNWA
Jose Enrique's bicep

Maybe make the differences in payments more substantial between clubs that finish in different positions? Or what about using the TV ratings to determine which clubs generated the most viewership, and then giving a little more to the more widely watched clubs?
Latortillablanca

huh... interesting stuff, no doubt. i can see fsg wanting to get tv rights deal locked up, but also, as american sports fans, i can see them warming to the idea of ffp and the parity that could potentially bring if enforced.

one of my main problems with football is the lack of parity, so i throw my hat in to the ffp side of the ring every time on this debate. in the nfl, every team is 2 good drafts and a couple good free agents away from being a super bowl contender, and what's not to love about that level of competition? how much cooler is the epl run in when there are 6 teams fighting for 4 places instead of 4 fighting for a reshuffled order of the top 4...? given its really a two horse race for the title this year, over time that'll change, but only if ffp is strictly enforced... so here's hoping the levy breaks towards ffp and away from the super league, which is an owner's wet dream, but logistically retarded considering you've already invented the wheel on that one (twice) with the uefa comps...
brother jon

nicely summed up. on whether it succeeds or not; i like that they've set it up where there are multiple WIN scenarios. increased revenue for us (super league, int'l tv rights), or less spending money for the competition (tighter FFP enforcement). and while LFC may be leading the charge now, this isn't a one team issue, or move. there'll be some muscle behind it. especially if/when clubs start issuing stock and have to start maximizing revenue, by law.

the financialization of football continues. i guess i'm just glad we've got savvy players in the back office. it's about time. and what's the worst that could happen? the rest of the league think the big clubs are ruining the premiership? we're already being hung with that one to a large degree, might as well do something with it. (while spinning the plausible sounding sweetener that this is really about saving the BPL). aggresive without being reckless, LFC style. i'm in.