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New PL overseas TV deal could be good for Everton

By Matt Traynor :  22/03/2010 :  Comments (14) :
Apologies in advance - this is kind of two posts in one, the first to set a bit of context...

Well, despite the proclamations that the global economic downturn would see a knock-on effect on things like TV money for the Premier League, it seems that the rest of the world disagrees.

The deal, which has taken over 12 months to put together, is worth £1.2 billion over 3 years. I've seen a number of commentators hail this as an almost doubling of the £625 million deal that expires at the end of this season, but actually that was a 2-year deal. Nonetheless, it represents an increase.

These short-form contracts are, to use the technical term, an absolute ball-ache to negotiate. I can't speak for the rest of the world, but in Asia, you have probably the largest market (India [South Asia but is included] and China are both 1 bn plus).

Countries of varying sizes — Brunei (400,000) to China (who really knows, but around 1.2 billion) means you have to be flexible about the rules of bidding. For instance, in countries where you have more than one broadcaster, they are not allowed to jointly bid.

Also, a lot of broadcasters are state owned. Many of these countries have military rule, or a democracy where the military wield a lot of influence. You can imagine how going into commercial rights etc. may be a little Thaksin, sorry, taxing...

A recent example: up until last week, Singapore was not going to be able to show the World Cup, as the price had more than doubled from 2006, and the broadcasters couldn't hope to recoup the money by bidding solo. At the 11th hour, FIFA's commercial agents allowed a joint bid — all in the interests of the $$$ eh?

Despite what some commentators think, Asia is not full of wealthy people. There are quite a few, but a cursory glance at average GDP figures show that most of these people won't be splashing out on a cable tv package (in countries where it's not shown on free-to-air, which is most).

In China, the TV rights holder for the Premier League had to pretty much sell it off to an Internet company after it tried charging for a service which was previously free; people protested, the Internet company offered to stream FOC (no doubt selling sign-up packages etc). Bear in mind that the PL is heavily endorsed out here with lucrative advertising, and programme sponsorship packages.

So, after setting some context, why is this good for EFC?

Firstly, it's guaranteed £20 million per year for 3 years for all PL teams. Remember, this is overseas TV rights only.

Secondly, the PL having negotiated this deal, and given what has happened recently with Portsmouth, are changing the payment terms. Someone correct me if I'm wrong, but currently PL payments are made in September and January, with performance payment at season end? With this new deal, payments will be monthly — around £1.7 million per month — so it includes payment during the close season.

I doubt this will stop some clubs hedging and still paying silly wages to players. But for a club that is trying to be fiscally prudent in a crazy environment, I would imagine Bill Kenwright, Bob Elstone and others are relieved when it comes to those cash flow projections.

So I'd like to ask readers three questions:

1) Do you think this will help, especially in the light of Portsmouth, or as this is still a minority part of the payment, will it make no difference?

2) Do you think this pay-on-the drip method would benefit Everton if it was extended to the whole of the TV payments (i.e. including domestic, but with performance still as an end-of-season one-off)?

3) Domestic readers — what do you think will happen at the end of the current domestic TV deal? Less... about the same... or more? Are people now switching off from Sky at home, and watching on the net, or down the pub (especially if 3D comes off!)

Like the majority, my main concern is Everton first, the rest second. I think after the wake up call of Portsmouth that maybe, just maybe, the PL are going to start looking at how cash is disbursed. I mean, let's be honest — for the self-proclaimed best and richest league in the world to have a club go into administration, is a tad embarrassing to the global audience.

Reader Comments

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Brian Noble
1   Posted 22/03/2010 at 08:42:34

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I don`t think it will make much difference.Everton,like many other clubs will arrange loans on the back of future TV revenues as they always have done,it seems.If there is more money coming in they will all be able to get bigger loans and expend even more on transfers and wages.After all, that what most fans want them to do,isn`t it?
Gavin Ramejkis
2   Posted 22/03/2010 at 10:55:22

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Agree with Brian, I don't think it will make a lot of difference. As far as Portsmouth are concerned I think there's a whole lot more than will veer come out, especially around the en masse buying and selling of players with The Lion out of the Wizard of Oz laughing all the way to one of his offshore accounts as he bought and sold players to himself and made cough cough non tax paid profits for himself, it's not coincidence that Southampton and Pompey with the same ex manager ended up in the same shit.
Roger Trenwith
3   Posted 22/03/2010 at 13:07:48

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The renewal of the Sky deal will be interesting. Personally I have recently stopped Sky Sports, as 1) it was too expensive, and 2) I found I rarely watched the football as we were hardly ever shown. I miss the exetended highlights programme though. I've gone to Virgin, mainly for the much better internet connection through cable.
Conversely a friend of mine has recently switched to Sky form Virgin (no Sports sub tho') as they are offering very good deals to new customers, so I guess their customer base is not shrinking, meaning the money available to pay for PL rights is not decreasing. I reckon the new deal will be roughly the same, maybe a small increase for inflation.
Roger Domal
4   Posted 22/03/2010 at 13:35:46

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It all comes down to player's wages. No matter what the transfer market is or was, it still comes down to weekly outlays for your players. Pompey went belly up because their wages were totally crocked versus their revenue. It wasn't the ins/outs of transfer, it was wages.

However, have we seen a top when it comes to money being spent on wages? Is Rio worth what he is paying paid now, is JT? Wenger might actually be the canary in the coal mine here. With Moyes right behind him. I don't want to make this an argument about wage structures, but I think the clubs are finally coming to realize that if Rio or Ronaldo walks because of wages being better someplace else, then so be it. You can cover and still win, IF you have the ability to find talent and bring them in. Wenger surely has done it with the Arse. And, do you really think that ManCity would make the Lescott deal TODAY?
James I'Anson
5   Posted 22/03/2010 at 15:05:20

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As Roger points out above, it's about wages. It wouldn't make any difference if it was an extra £100m because we are all in competition for the same players. It's definitely good news for the players though because they're the ones that will get it.
Nick Entwistle
6   Posted 22/03/2010 at 21:59:58

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It will all go to the playersand agents... accept at our club as it will go to redeveloping Goodison ahem....
Bob Parrington
7   Posted 22/03/2010 at 22:52:12

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I tend to agree with Roger (4). Everton FC is a business. Players are capital purchases and so are "Assets". Assets and cash flow are dofferent animals. There's no point being asset rich, cash poor because it is the latter that will create the problems. OK, you can sell the asset but...............

It's good to see the lads scoring regularly and the supporters reasonably confident going in to games that we will probably win.

For some reason, I just have this gut feel that we are on the cusp of a changing of the guard in the Merseyside battle!!!! The RS are self destructing and we're steadily on the way up. Won't that be good if it's right? after all these years.
COYB
Tom Harries
8   Posted 23/03/2010 at 08:14:50

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"For some reason, I just have this gut feel that we are on the cusp of a changing of the guard in the Merseyside battle!!!! The RS are self destructing and we're steadily on the way up. Won't that be good if it's right? after all these years.
COYB"

Next season will be either chaos or a major rebuilding job over that side of the park. We NEED to have a good pre-season and especially a good start.

Particularly since Chelsea aren't getting any younger, either. They can still afford to buy new players but who's to say they'll get it right? Wonder if they'll have another new manager next term?
Tim Kells
9   Posted 23/03/2010 at 11:06:53

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Yes pre-season and the start is key. also key is keeping the squad intact. Getting Pienaar to sign a new contract and signing a new striker are also key in my opinion. COYB.
Tim Kells
10   Posted 23/03/2010 at 11:06:53

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Yes pre-season and the start is key. also key is keeping the squad intact. Getting Pienaar to sign a new contract and signing a new striker are also key in my opinion. COYB.
Roger Domal
11   Posted 23/03/2010 at 14:40:05

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I believe it comes down to BUYING the right player, and not just having the money. The money that the FSW (he looks ready to explode, someone has to buy him new shirts!!) has to spend is fantastic, but if he wastes it on a player like Aquilani, there goes 20 million! And look at SAF, does he really think he made a good deal for Berbatov? And I'm sure our Billy is under the same microscope. If there is x amount to spend, and you spend X and it is a mistake, there is no more to cover with. That's when bad stuff happens. Also, the amoount of quality matches all of these players are playing is making them old fast. If you saw that prick Stevie G. coasting through the ManU match sunday, you would be pulling your hair out if you were an RS supporter. If he goes, and Torres goes, and the back line falls apart, and REina leaves, then you have a solid mid-table squad with NO youngsters. Have they had ANY BODY from their academy play a first team match in the the past few years? That gets fucking expensive, when you can't bring in youngsters.
Bob Parrington
12   Posted 23/03/2010 at 22:12:05

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I'd like to see us sign up a strong, fast right full back who can head the ball. Defending crosses has been a weakness of both Pip and Hibbo. When Jags is back up to speed and playing with Heitinga we'll have a solid back 4. Midfield is looking good.

I'd go along with the suggestions of finding another striker who really knows where the net is. As for the other position - manager - my view is that we have the best one in the PL even with some of the previous tactical mistakes. We've played some crappy stuff at times but, lately, we've also played some fantastic football, too! Still young as managers go, he's prepared to learn.
COYB
Matt Traynor
13   Posted 24/03/2010 at 14:47:45

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Roger, I agree with you regarding FSW. Pre-season before last, he desperately tried to flog Alonso to Juventus for 10m, to raise a bit extra to bring in Gareth Barry.

12 months on and Alonso no longer wants to play for Benitez, and admittedly, they get a cool 30m from Madrid.

The guy is a fool in the transfer market. Why do you think the board balked at paying 18m for Barry?

Shades of Steve McManaman. (I know him, his old man is a mate of mine etc etc). Treat players like shite, they'll shit on you.

One good aspect about Moyes is the stories you hear about dressing room unity - despite what RS mates who know someone etc. triy to wind me up over.

Acquilani. Ha ha. Good scrabble score. And, er, that's it?
James Flynn
14   Posted 24/03/2010 at 23:52:13

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It's how you spend the money and for what. Big, splashy, in the news signing? Keep your fingers crossed (as we all know). Money used for scouting and development? Not sexy, but a btter route to consistent excellence.

SOF was signed to a shit side taking a gamble how many years ago. And here we are. He used the money available (not much for years) building ManU to the international juggernaut it is.

Now Moyes (assumingly) has some money to play with. The amount does count, but how he spends it is critical, not throwing it at a famous name.

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