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Why Premier League Clubs May Want To Dismiss The Middle Men

radio Why Premier League Clubs May Want To Dismiss The Middle Men

Video killed the radio star. But, in fact, it didn’t. It only transformed the industry. Radio still lives. It’s just not that important anymore. However, record companies surfaced a worse fate. Napster brought music piracy to the mainstream, while later iTunes revolutionized the industry making albums less important and singles more consumable. At the same time, you’ve had artists such as Nine Inch Nails, The Cult and Radiohead selling albums directly to their fans without the need for a record company to get involved at all, allowing artists to take a larger cut of the profits.

So what does this have to do with soccer? Everything. In the above example of the record company industry, the middle man is getting cut out of the equation and while the record company industry may not die, it’ll be the independent ones that will continue by distributing music to fans who are loyal to boutique labels. In soccer, the clubs are the artists and the middle men are the television networks.

Take, for example, Manchester United. The club has its own television channel, MUTV. They have state-of-the-art equipment, proven experience putting together high quality productions. And a staff of qualified individuals many of whom have experience working with Sky Sports and other broadcasters.

At the same time, Manchester United has an enormous number of fans worldwide who eat, live and breathe United matches on a weekly basis. What if Manchester United was able to do a deal directly with supporters to show each and every home and away match, delivered to you via the Internet or a MUTV channel through your cable and satellite provider? For United supporters, as long as they can access the content, there wouldn’t be any negative. In fact, a MUTV broadcast of a live Manchester United match may be able to feature additional content either before or after matches, or during half time, that a typical broadcaster would not be interested in or would not have access to.

For Manchester United, the opportunity to amass a greater portion of the revenue from the TV rights to those home and away games would be enormous. In the beginning they may not be able to do a worldwide deal, but even if they were able to negotiate contracts in China, India, Malaysia or other countries, the benefits for Manchester United would be transforming.

So where does that leave companies such as Fox Soccer Channel, ESPN, Sky Sports and others? Of course, they’ll fight to keep control of their TV rights but you have to wonder what value they provide other than showing live matches (especially if you can watch the games directly from your favorite club). ESPN has plenty of other sports programming to fill its channels as well as access to pundits and breaking news in the United Kingdom. Fox Soccer Channel has its sister relationship with Sky Sports so it could continue to distribute Sky’s news on the American channel. But in reality, take the Premier League games away from ESPN and Fox Soccer Channel, and there isn’t much value left for soccer fans who eat, live and breathe Premier League football.

Now if you’re a Manchester United supporter, it’s all well and good to be able to purchase a package that would allow you to watch all the matches via the Internet and/or MUTV, but two challenges remain. The first is that not everyone is a Manchester United supporter. And there are many people, especially outside the United Kingdom, who are fans of the Premier League, not specifically one team (although they have one which is their favorite, it’s not the same as being only a die-hard Man United supporter who only watches United matches).

The second challenge is distribution. Soccer fans in the United States know how hard it is to get Fox Soccer Channel in HD and Fox Soccer Plus. On cable providers, the distribution of those channels has been woeful. Most cable customers in this country still can’t get either channel.

So if distribution woes continue to be a problem, and I don’t see them getting resolved anytime in the near future, then the key to success will be watching content streamed to your television set via a broadband device (either your computer hooked up to the TV via HDMI cables, a streaming device such as Roku or Boxee, or watching the games directly on your laptop). With this equation, all you would need is an ISP who will provide you with speedy access to the Internet, and payment to Manchester United via a per-game or per-season package. If clubs are smart, though, they’ll work together to offer a Premier League package which would offer all the games to watch online.

A lot has to happen first before any of this can materialize. There are a lot of battles to be staged. The Premier League will not want to give up its lucrative TV deals which is what has fueled the success of the league since 1992. In a sense, the Premier League itself would be fighting against its own clubs to maintain control of who collects the money. I don’t see the Premier League giving up their control unless the vast majority of Premier League chairmen wanted to do their direct deals with soccer fans worldwide.

All of this is unchartered territory, but I believe it’s the way that soccer is heading, specifically the Premier League. In the coming years, it’ll be interesting to see what developments occur overseas, especially in Asia, to see if clubs such as United try to do direct deals to bring their matches to consumers. That could be the launching pad for a paradigm shift, and an opportunity for football clubs to significantly increase their value by becoming global entertainment providers directly receiving revenue from soccer fans worldwide.

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About Christopher Harris

Founder and publisher of World Soccer Talk, Christopher Harris is the managing editor of the site. He has been interviewed by The New York Times, The Guardian and several other publications. Plus he has made appearances on NPR, BBC World, CBC, BBC Five Live, talkSPORT and beIN SPORT. Harris, who has lived in Florida since 1984, has supported Swansea City since 1979. He's also an expert on soccer in South Florida, and got engaged during half-time of a MLS game. Harris launched EPL Talk in 2005, which was rebranded as World Soccer Talk in 2013.
View all posts by Christopher Harris →

17 Responses to Why Premier League Clubs May Want To Dismiss The Middle Men

  1. I’m surprised that a brand as strong as Man Utd haven’t been able to negotiate their own rights already, but The Premier League was formed in 1992, so that all the top flight clubs could reap the benefits of having live televised games (prior to that, I think there was very little live English top flight soccer, even on UK television).
    I wouldn’t want to see this happening – where powerful clubs like Man U, Chelsea or Arsenal can negotiate their own settlements – for the very reason that that is what happens in Spain. Barca and Madrid have now become so unattainably powerful, the other clubs can’t even mount a sustainable challenge – and I think that’s what would happen in England.
    Tottenham’s ability to challenge for Champion’s League places has been their ability to maintain the same spending power as the bigger clubs, due to them getting a significant share of the overall TV money.

  2. Jose says:

    This scheme you’re speaking of only benefits the big teams who have the money to bankroll their own tv stations, i.e., arsenal, chelsea, liverpool. The smaller clubs, who make up the majority of the epl as well as the ones coming up from the lower divisions, are the ones who benefit most from having the distribution system in place and would stand to lose the most if the big teams pull out of the current system and go out on their own.

    • The Gaffer says:

      Jose, good point, but what if a big club like Manchester United had an away match against Blackpool, and United came in to the Seasiders and offered them a massive sum of money for MUTV to broadcast the game to fans worldwide (as well as ensuring that Blackpool supporters would have access to the game)? Even the smaller clubs would get a lot of money by outsourcing the broadcasting of games to the big clubs.

      By the way, I’m not saying that I agree with the scenarios outlined in the article. I’m just writing my thoughts on where it could go.

      Cheers,
      The Gaffer

      • Dave C says:

        That would be beneficial to Blackpool, but the difference is that although Blackpool would be getting this big pay day from MUTV once or twice a year (plus maybe big pay days from “Chelsea TV”, “Arsenal TV” etc), Man Utd would be getting that big pay day every single week.

        I think you’re right that it might go that way eventually, but I hope that the league maintains some form of revenue sharing system, to make sure that it doesn’t just turn into an endless stretching of the gap between rich and poor.

  3. Kyle says:

    Individual TV rights are a stupid idea. It might make it easier for us here but it could end up like Scotland. Who will want to watch if we know who will win every time. I for one don’t see his this will help the game at large. From a consumer standpoint maybe but I am a fan and not a consumer. Something more more workable might be those clubs who have there own TV channels to have them online. I as a Liverpool fan can watch every game played on delay at 7 pm plus a much larger array of content. Also with an actual TV network you her at least in practice unbiased reporting and commentary on matches.

  4. La Liga has this sort of system and look at the state it’s in right now. Sure it may be great for the “big teams” but they don’t define an entire country of football fans. It is a fair system as it is and can hugely benefit the smaller teams in England. This sort of system would only widen the already giant gap between the top four and everyone else.

  5. Earl Reed says:

    I don’t think it works as well in a situation where you’re only getting game content twice per week at most. I mean, maybe you want to watch a short on Scholes’ tips to proper dental hygiene or Rooney’s trip to the museum, I think I’ll stick with putting a nail through my cornea.

    The YES Network works because there are Yankees games 6 days per week from March through October, and they eat up 8 hours of programming once pregame, postgame, and a complete replay of the game are through.

    The current system isn’t perfect, but I think the entire product will suffer if teams like Manchester United and Liverpool go it alone.

  6. mattjg says:

    Rather than distributing broadcast rights on a team-by-team basis, I think the next step would be the EPL directly distributing the games. MLB and the NHL already allow fans to pay for the right to stream every game through their computer or connected device such as Roku or PS3. I would gladly pay the $100 or $150 it would cost to stream a season of EPL matches, especially since I would save about that amount by dropping the sports tier from my cable package.

    • bradjmoore48 says:

      I would agree this is the more likely scenario. The EPL as a brand would cast a larger net in terms of audience numbers than just ManU or Chelsea or Liverpool on their own. There is already a Premier League Network now, correct? So the base channel is already there, they’ll just need to get on enough tv/satellite operators and then they can begin pulling their rights from Sky, Fox, etc.

      Sky is already having issues with their TV rights in the UK as is. This past week, an advocate general from the EU ruled that basing TV rights on territorial exclusivity (i.e. Sky limiting EPL tv in UK) went against EU laws, and that pub owners in the UK who wanted to use foreign decoder cards to watch EVERY EPL match, not just the ones Sky shows and including matches in the blackout period (245 – 515pm GMT). If this goes to court and the EU rules in the foreign decoder providers/pub owners favor, Sky will then really have to rethink how it distributes EPL matches, as fans can now go to a pub and watch every EPL match. If the EPL saw the opportunity to cut out Sky and provide their own live content to UK citizens, at a reasonable price to satellite owners, more television exposure = more $$. It may also force some clubs to drop their ticket prices if they want people to show up at the stadium, or provide an experience more commensurate with the high prices paid.

  7. brn442 says:

    Indeed, I have no problem cutting out the middle men the likes of Comcast, Time Warner, and Cablevision, and the even the likes of Sky, ESPN, and Fox some day in the future.

    However, the point – the whole point of why the Premier League was formed, was to share TV revenue amongst the English top division clubs. Having teams negotiate their own deals at this point in time will a complete disaster – you just have to look at La Liga as evidence. Having a healthy, competitive league is a value to all clubs.

    Also, it may come as a shock to many on this blog but most epl TV viewers are not hardcore tunnel vision club fanatics. Anyone can pay for those club channels now but to in effect, force someone in the Philippines, Hong Kong, or New Jersey to shell out a subscription fee on top of whatever they pay for general access to the epl will not be easy.

  8. EdmontonScouse says:

    Isn’t this missing the fact that not only are TV broadcast rights to EPL games negotiated by the Premier League itself and has little to do with the individual clubs, but also that a condition of Premier League membership would be an agreement to this collective bargaining scheme?

    Effectively the clubs have no choice in trying to set up their own broadcasting schemes, because they do not own the legal right to the broadcasting, the EPL does. And a change to this would most likely require a significant majority vote from the clubs to change, which will not happen as the majority of EPL clubs would stand to lose significantly if the current system was to be changed.

  9. trickybrkn says:

    Gaffer, I think it needs to be a PL wide distribution channel.

    How great would it be to have an MLB type app for broadcast over IP. You can sell it worldwide, and still leave the TV rights as is. Granted the value of those right would diminish over time, but so to would revenue be gained from IP/app sales.

    The same way iTunes took on illegal music sharing, this would kill off the illegal streams.

  10. JonesJunior says:

    This blog post is completely unrealistic. If what you proposed actually occurred the league as you know it would completely crumble financially (I am not exaggerating at all). Do you know who distribute MUTV? A middle man, not Manchester United themselves. There is always a middle man/broker. The only places that don’t have them are leagues with awful worldwide penetration.

    Premier League clubs and 90% of sports leagues don’t have the resources to sell media rights on their own. Who would you rather have help distribute your media? Agencies with relationships with every broadcaster or take it upon yourself to forge those non-existent relationships?

    And the internet distribution alone would never work. You are killing the value of your own product. I won’t even get into technical aspects, transmission details, the people who do the actual productions, etc. If you take a product and put it primarily online, you are murdering it. No encryption methods in the world can stop someone from spreading your feeds. Subscription fees to access matches directly from a club, will never match the billions the league already makes in rights fees. And what about advertising? Would you rather show an advertiser 400,000 subscribers or the reach of 500 million households?

    As a last FYI, club channels retain their rights entirely with no exclusivity. What that means is if Blackpool played Man U on MUTV, Blackpool doesn’t get a cent from the sale of MUTV rights. Blackpool could show that exact game on Blackpool TV, if there was one, and Manchester wouldn’t get a cent from that either. But Blackpool TV would only financially benefit from their own channel, which I doubt that many people outside Blackpool would support.

    The way things are now are actually very good. As someone above mentioned, look at the struggles in La Liga. What you propose would be that but 5 times worse.

    The honest truth is if your country can’t make every EPL or any other big leagues matches available to everyone nationally, it is because their is not a strong enough demand for it. If there was it would happen.

    • The Gaffer says:

      JonesJunior, the blog post may sound completely unrealistic, but it’s based in reality in that I know that one or more Premier League clubs have been considering it.

      Right now if Blackpool played Man United on MUTV, Blackpool wouldn’t get any money from it. But if United approached Blackpool to do a deal whereby Manchester United would handle the broadcasting of the match, United would offer Blackpool, I’m sure (hypothetically, of course), a deal that would definitely appease the Seasiders.

      Cheers,
      The Gaffer

      • JonesJunior says:

        It would be rough Gaffer. You’d have to take one game at a time and then I’d imagine MU would want their sponsors and advertisers on their productions. Plus how bout us fans that like multiple teams? I still want to see other teams games without having to pay for 5 different subscriptions.

        • The Gaffer says:

          There are definitely a ton of unanswered questions, but a club such as Manchester United is only looking at their own best interests, so if it’s able to make a ton more money taking the game direct, they won’t worry so much about the Blackpool’s of the world or soccer fans like ourselves who like to watch all Premier League teams.

          I’m happy with the way the system currently is, but I don’t think it’ll last this way in a few years.

          Cheers,
          The Gaffer

  11. olivert says:

    The teams in the Mexican First Division have been cutting their own TV deals in Mexico and the U.S. for over 20 years (note: the U.S. TV rights for Mexican First division clubs are worth about 2 to 3 times what the Mexican domestic TV rights are worth.)

    Yet, neither Chivas Guadalajara (the only one which sells Mexican and U.S. TV rights separately to different companies on its own) nor Club America (which is owned and operated by Mexican TV giant Televisa) could dominate the league. Chivas in particular was a joke last season, and Club America is awful this season.

    What “secret ingredients” do the Mexican League have to level the playing field so that neither Chivas nor Club America can dominate?

    Answers:

    1. No relegation pressure for most smaller teams because only 1 team is relegated at the end of each year. Furthermore, relegation is determined by the “3-year average”. Because one bad season does not condemn a club, clubs can clean house and rebuilt more often without relegation pressure.

    2. 2 short seasons instead of 1 long season each year. Teams can “clean house” more often and start over.

    3. 8-team playoff to determine the champion so that there is an element of “luck” (I have lost count the number of times the #1 seed was eliminated by the #8 seed.)

    4. The smaller “brands” are all trying to spend as little money as possible to finish 8th so that they have a shot at winning the playoff tournament. The playoffs prevent a team from “buying” a championship.

    5. A free agent “draft” takes place in the summer to redistribute the veteran talent.

    ==

    Even with “collective” TV rights sales, the same clubs dominate the English Premier League.

    Why?

    1. No salary cap. A billionaire can spend as much money as he wants.

    2. No limit on debt level. The “big” brands can mortgage everything to issue bonds (read: Manchester United.) The smaller brands can’t.

    3. No draft of any kind.

    4. One long season with no playoffs. By early November, less than 8 teams have a chance at the title and/or spots in Europe. The rest are playing to avoid relegation.

    ==

    La Liga is even worse. Why?

    1. Real Madrid and Barcelona have access to government bailouts and lines of credit that the other clubs don’t.

    (Recall the last time Real Madrid got into a financial hole, it got a government bailout in the form of new land for a training center at a cost of 1 Euro. Real Madrid sold its old training ground to wipe out its debt.)

    2. Debt limits apply to all clubs except Real Madrid and Barcelona.

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