Liverpools threat of breaking away from the Premier League Broadcasting deal.

A few days ago I talked about the landmark case in regards to Premier League broadcasts in Europe, and how there may be important changes coming in regards to how the rights are sold across Europe.

Now the threat is not from decoder cards and external forces, but internal ones.  Liverpool has started to make threats about breaking away from the Premier League’s current overseas broadcasting deal.  Liverpool’s challenge is that the TV rights for Premier League clubs should be sold overseas on a club-by-club basis.  In other words, Liverpool believes they and other clubs should have the right to sell their own broadcasts overseas.  Liverpool’s managing director even came out publicly and stated that this is:

“a debate that has to happen”

The Guardian notes that the current Premier League deal is set up as follows:

Since the Premier League’s foundation in 1992 its success has been largely based on the principle of collective selling, where each club no matter how lowly can expect a fixed share of TV deals with “merit” awards for finishing positions as an add‑on. Changing this model would risk revolt from the smaller clubs who stand to lose most, and thus threatens the league’s very structure.

Liverpool thinks that the super powers of the Premier League, Manchester United, Chelsea, Liverpool, Arsenal (the clubs who are usually at the top of the table) should be getting a bigger share, as they are the ones who are bringing in the large audiences.  Again, these are deals which are worth billions of dollars to the Premier League, but if the money was not split evenly, and were sold on an individual club basis, it would mean an even greater imbalance in club revenues.  And of course, club revenues are a big part of buying talent, and hence being able to perform on the field.  Such a deal would be problematic in my mind, as it would destroy any sense of competitive balance in a league that already has balance issues, especially at the top.  Furthermore, it could mean that the mid-level and low-level clubs would be even poorer, and would not be able to field as attractive a product.

I point to La Liga, where two teams (Barcelona and Real Madrid) dominate the league in regards to revenue, and pretty much dominate on the field as well.  I think the Premier League, for the sake of having a better product, should continue to share revenue, and have the TV rights package deal sold in a single group.

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