Will the Premier League kill Major League Soccer?

April 20, 2013

This past week, NBC announced that they will show every single match of the Premier League campaign in the United States beginning at the start of next season, which begins at the end of the summer in 2013.  This means that NBC will literally use its empire of networks to broadcast Premier League games from England during the weekends.  There is even a graphic going around, showing that on May 11th, 2014 – what is referred to as “Championship Sunday” or the last day of the Premier League season – there will be games on the following NBC channels: NBC, NBC Sports, USA, Bravo, CNBC, SyFy, Esquire, MSNBC, E! and so forth.  I’m sorry, but Premier League on SyFy seems to be quite a reach, but NBC has paid $250 million for the 2013 Premier League rights, and they want to do things the right way.  As their press release notes:

Details of the 2013-2014 NBC Sports Group Premier League programming include:

  • All 380 matches presented live on television with studio pre- and post-game coverage;
  • All 380 matches streamed live via NBC Sports Live Extra;
  • Games not aired on a designated NBCUniversal channel will be made available to distributors via Premier League Extra Time, a package of overflow television channels available at no extra cost for each of their customers who receives NBC Sports Network;
  • Championship Sunday – May 11, 2014, when all 10 Premier League matches will be available live on a different NBCUniversal channel;
  • 76 Spanish-language telecasts, 10 on Telemundo, 66 on Mun2;
  • More than 600 hours of Premier League original programming.

NBC SPORTS LIVE EXTRA: Every Barclays Premier League match will be streamed live via NBC Sports Live Extra, the NBC Sports Group’s live streaming product for desktop, mobile and tablets and, in most cases, on the digital platforms of participating cable, satellite, telco and other video subscription services. The vast majority of Barclays Premier League matches will be streamed via “TV Everywhere,” available on an authenticated basis to subscribers of these services.

NBC happens to have the rights for Major League Soccer as well, which they pay $10 million a year for.  In this current deal, NBC shows usually one or two MLS matches a week, with the Premier League they will be showing around 10 matches a week through the season.  Some people have discussed that the deal would be beneficial for MLS, as it would draw more soccer fans to the NBC network who could then carry over watching Premier League matches to MLS matches.  I believe that this logic doesn’t fully fit.  First, the MLS matches would usually not transition smoothly with the Premier League, unless the MLS started playing at 10 or 11am, which would mean much less fans in the stadium.  At this point in time, fans in the stadium are the lifeblood of the MLS, as the revenues from television, once distributed, aren’t even worth a quarter of a team’s salaries for a season.  In this, the Premier League may not kill the MLS, but could draw some major attention away from the professional soccer in the U.S.

Time will tell how this deal affects MLS, but I personally think obtaining the Premier League rights was a great move by NBC.  For many years, I was part of a that crowd of people who paid extra money to get Fox Soccer on their cable plans to watch matches early on Saturdays.  Now, NBC will bring the Premier League to a national audience on over-the-air channels, meaning that people can watch certain Premier League matches without paying.  I think that this move could really help heighten the popularity of the Premier League, though I’d be curious to see how well ratings do on NBC during college football season.  The games wouldn’t overlap, but I am not sure how many college football fans will turn on their television sets early to catch Fulham play Everton.

Man Utd to IPO… in the U.S.

July 4, 2012

Manchester United, one of the worlds biggest brands and highest valued sport franchises has decided that they will pursue an Initial Public Offering to raise $100 million  in the U.S.  This isn’t probably that strange of a thought, as the team is owned by Americans, the Glazer family to be specific, who also own the Tampa Bay Buccaneers.  However, I can see that many individuals will be quite unhappy in England, as there has already been a lot of backlash against Premier League teams being bought up by foreign investors.  Now with stock being sold on the U.S. stock exchange, I believe that there will be another wave of criticism.

Another question arises in, whether it would be worth the money to buy stock in Manchester United.  Certainly the franchise has a high value, but many football clubs in Europe have been running large debts, and it doesn’t seem like a sure thing that this stock will make quick money for anyone.  As a long-term investment it may make sense.  That said, I already know several people who live in the U.S. who are rather excited, as they love the prospect of being able to own a piece of their favorite club.

The Glazer’s were also hoping to sell of a good chunk of stocks on the Singapore markets as well, however the volatile nature of the Asian markets has caused the $1 billion Singapore IPO to be put on hold for another day.  CNN notes that this comes after Formula One also put a halt to their IPO in Asian markets because of too much uncertainty.

Manchester City’s New Record Losses!

November 18, 2011

Manchester City has announced that they have achieved a new Premier League milestone, they have posted the worst losses for any club in a single year, at a sum of £194.9 million.  The team owned by Sheikh Mansour currently sits on top of the Premier League table, and seems to show that better performance (and potentially championships) can be won by just dumping money into a team.  UEFA has now implemented a “Fair Play” financial rule requiring teams to be more financially responsible if they are to be allowed to play in confidential competitions such as Champions League and the Europa League.  Man City’s losses would have gotten them banned in future years, but because the losses come before the accounting window begins, they are safe for now.

The ESPN soccernet article linked above did note that the change in financing has taken consistently mid-table Man City to top of the table, and while costs have increased, so has revenue.

The Blues are also pointing out that commercial revenue has risen 49.7% to £48.5 million and TV rights, thanks to the club’s third place Premier League finish, winning the FA Cup to end a 35-year trophy drought and a run to the last 16 of the Europa League, have increased 27.4% to £68.8 million.

The question is, will Man City be able to keep up their performance in future years with more limited ability to spend money because of the “Fair Play” rules.

Promotion & Relegation out in the EPL? In for NCAA Football?

October 17, 2011

The influx of foreign investment into the EPL has been widely discussed on this blog by several authors.  I am also currently teaching a class that is a comparison of domestic (North America in my case) and international sport environments.  One of the biggest structural differences which we have between North American and European leagues is the concept of “promotion and relegation” used in Europe.  That is, European leagues tend to demote a few of the bottom teams to a lower league, and replace them with the top teams from the that lower league.  In this, the European leagues can be considered “Open” leagues where the composition of franchises changes from year to the next, while the North American leagues are “Closed” (or static) leagues where the teams do not change, except in the rare case of expansion or contraction.

It seems a lot of the foreign investors in the Premier League are not happy with this current structure, and want to get rid of promotion and relegation.  This is quite understandable, as buying a Premier League club is not cheap, and these investors are buying these clubs because of their association with the Premier League.  If they were to get rid of promotion and relegation, this would mean that they would have a lot more safety and certainty in protecting their investment.  Who close are we to this becoming a big issue?  I think pretty close, as League Manager’s Association leader has said:

“There are a number of overseas-owned clubs already talking about bringing about the avoidance of promotion and relegation in the Premier League. If we have four or five more new owners, that could happen.”

That’s right, a few more people and they may be invested in changing the system to mimic the closed systems of North America.  I am against this, as a closed league would take a lot of interest out of the bottom of the table battles for relegation, which hold fan interest in even some of the poorer teams in a league.  There are lots of implications here, this would change the competitive balance in the league, potentially across several leagues, and it could mean that teams at the bottom of the Premier League could field weak teams with low payroll, and continue to collect the big revenue from Premier League media contracts.  In this, I am against a change in the system.

In other news, Mark Titus, writer for Grantland, has said they should realign college football in a big superconference that uses the promotion and relegation system.  Simply, he wants college football teams put into divisions which are tiered levels, and then have them able to move up and down between divisions using promotion and relegation.  Personally, I don’t think college football fans or North American audiences are too receptive to this type of system, and that it would have a hard time being implemented and succeeding.  Possibly one of the biggest issues would be scheduling and traveling, as a superconference could have Alabama playing Boise St. one week, and then Wisconsin the next.  That would be a tough travel schedule.  That said, I do like that the promotion and relegation systems are entering the mind of the North American sport fans and media.  It is a system that is not perfect (neither is the static/closed leagues), but it does have some advantages that are worth meriting a look.

H/T to IJSF blogger Brian Soebbing for sending me the Grantland link.

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

October 12, 2011

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.

How a landlady may have changed the face of Broadcasting sport in Europe

October 7, 2011

This is a story of a landlady for a Portsmouth pub in the UK, who bought a satellite television decoder from another European country to show Premier League games.  Karen Murphy, the landlady for the Red, White and Blue pub in Portsmouth bought a Greek decoder card to show Premier League games, the key point in all of this is the decoder card is cheaper than paying to show the games on BSkyB, as most establishments do in the UK.  This case made it all the way to the European Court of Justice (ECJ), where a ruling was made yesterday against Ms. Murphy who will be allowed to continue broadcasting games using the decoder.  The ECJ states that prohibiting:

“import, sale or use of foreign decoder cards is contrary to the freedom to provide services and cannot be justified either in light of the objective of protecting intellectual property rights or by the objective of encouraging the public to attend football stadiums”

However, the ECJ said that this area does fall under copyright protection in the UK which means that while Ms. Murphy lost because the card is used for broadcast to the public, it does open the door for private use of the cards.  The Guardian article notes:

However, the ECJ said live match coverage itself was not covered by copyright protection, although the Premier League could claim ownership of FAPL-branded opening video sequences, theme music, on-screen graphics and highlights of previous matches.

This means that as long as the FAPL and BSkyB ensure that match coverage includes enough copyright elements pubs will not be allowed to show foreign broadcasts.

The big implications of this case, is for individuals.  The ruling basically counter acts the territorial region-by-region rights which the Premier League sells.  It is now possible for fans to go out and get the cards and get Premier League for cheaper.  This means that fans could potentially try and get around paying the high BSkyB fees, which BSkyB can’t be a fan of as they paid over one billion pounds for the broadcast rights in the U.K.  The big implication is that the Premier League may be forced to change the method in which they sell broadcast rights from regional, to a single Pan-European package.

The Premier League had this to say:

“The areas of law involved are complicated and necessarily we will take our time to digest and understand the full meaning of the judgment and how it might influence the future sale of Premier League audio-visual rights in the European Economic Area.”

The Premier League will have to wait for some further court rulings in the UK high courts in regards to this case, but they are probably worried.  They are said to make a billion pounds for their non-UK television rights this year, and are receiving around 1.6 billion pounds for UK rights from BSkyB.  How they will potentially switch their sales of broadcast rights is an important question, with big financial implications for the league as well as fans and consumers alike.  As a side note, the Guardian had a poll, and almost 75% of people said they would now try to buy the foreign decoder cards to watch Premier League matches.

Sepp Blatter doesn’t call it a “crisis”

May 30, 2011

That’s right, despite several previous posts (here, here, and here) noting the bribery and corruption issues which have hit FIFA, Sepp Blatter claims that the organization is not in crisis.  It seems with each passing day (or literally, a few passing hours since my previous post) that more details and news seems to make this FIFA bribery and corruption scandal look even worse.  Blatter said in a very lively press conference:

“Crisis? What is a crisis? Football is not in a crisis.  We are not in a crisis. We are only in some difficulties and these difficulties will be solved — and they will be solved inside this family.”

I think someone is in denial.  There is clearly a mass of issues here, but Blatter is most likely to be president for another couple of years, and probably his ego tells him he is in control, so nothing can go wrong.  But with all these issues which have come under his watch, how can anyone really trust FIFA in the future?

In more corruption news, FIFA cleared Nicolas Leoz, a FIFA member from Paraguay who had been charged with asking for favors in return for his vote for the 2018 World Cup host selection process.  Reading a report on the 2018 World Cup host selection process on FIFA’s website, you can see that it is alleged that Mr. Leoz’s assistant asked for the FA Cup to be named after him, and a knighthood and in return he would give a vote for the 2018 World Cup to be held in England.  You can read the full report: here.  It is full of great quotes and allegations, yet FIFA somehow is saying this really didn’t happen, or it isn’t serious enough to take into consideration.

The question arises: Why is Blatter and Leoz off with no charges, but Bin Hammam and Warner suspended?  It all points to FIFA keeping those who are currently in higher positions of power in their current place.  I don’t know how much damage control FIFA can do, but I’m thinking that this whole scandal could be costly.  I’m imagining countries are going to be less likely to pour money into World Cup bids with all of this news.  Of course, the counter-point could be that they might actually put in more money, knowing that a few well placed bribes could be the secret to being named a host.

In one other piece of news, I’d like to congratulate Swansea for their 4-2 win over Reading earlier today to secure promotion from the nPower championship up to the Premier League for next season.  The boost in revenue should be nice for them, but we’ll see if they will be able to hang around the top flight of English professional soccer for long.