Season 2011-12 Fan Articles

Overseas TV Revenue Change?

By Matt   Traynor  ::  12/10/2011   51 Comments (»Last) Liverpool FC are currently trying to get the split of the overseas TV revenue changed to better reflect the appeal of the top clubs.

Currently the Domestic TV deal is 50% flat fee, 25% facility fees (number of live appearances, minimum 10), and 25% prize money (around £750k per place). For the top earners last season (Man Utd), this was about £66m, for the bottom earner (Blackpool|) it was about £39m. It's the most equitable TV deal of any major league, and is unlikely that it will ever change.

The overseas TV deal is different. Now unified so the term is the same as the domestic agreement, it is done under long-form contract agreement with overseas broadcasters.

The current deal gives all clubs an equal share of around £18m a season. Therefore with the domestic guaranteed minimum, this gives around £57m a season before matchday revenue and commercial. (This really shows why EFC are way underperforming in these other primary revenue streams).

LFC's argument is that people in the UK subscribe to Sky to just watch their own team (note that you are only guaranteed 10 games, and around half of the league teams do in fact get shown only ten times).

MD Ian Ayres (who apparently spent half of his life growing up in Asia) reckons that it's the same overseas, and therefore clubs should be able to negotiate their own overseas TV deals.

I hope this won't happen, and believe it won't for a number of reasons:

? For us it'd be devastating to revenue. We are already too dependent on TV broadcast revenue as a proportion of total revenue, and given we already lose £5m pa, then you can see how this would make things worse, quickly.

? I can't imagine the majority of teams going for this (turkeys voting for Christmas etc)

? Liverpool (and Man Utd, Chelsea, City, and Arsenal) already benefit disproportionately through "global" appeal and their sponsorship deals.

? The fact that these teams are shown so much on the overseas market is a facsimile of the UK media coverage of them ? in some markets therefore people will naturally align themselves with certain teams cos they're the only teams they ever see.

? I believe Liverpool are panicking slightly here. Man Utd and Chelsea are now joined with City as the teams with resources to cement their CL places. Therefore Liverpool are "relegated" to duking it out with Arsenal, and whoever that season's surprise package is for the 4th place / CL qualifier slot.
NESV are not going to commit similar resources.

As mentioned earlier, our proportion of matchday and commercial revenue is too low. We know the limitations of matchday due to the stadium, but I believe we should be doing more on the commercial side given:

? We have a large Asian corporate as main sponsor

? We have some of the top overseas players in their domains (Cahill, Howard etc)

? The likes of Chelsea have now opened an office in Singapore to look for new sponsorship opportunities (they already have an Asian sponsor). You can bet this can also be to look for new investment if it was ever needed.

I don't know that Everton aren't pursuing this, but I believe they should. Sad to say, but in the same way that a lot of British companies are now foreign-owned (loved the indignation over the loss of that contract for our Canadian train builders!), it's likely that any new owners / investment etc will come from overseas. Hope we've not already missed that boat, along with all the others.

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