The Premier League yesterday pulverised the theory that English football's boom time has been and gone when it announced it would earn a staggering £1.7bn from its live domestic TV rights in the three seasons from 2007-08 onwards.
As sensational as the headline figure is the fact that BSkyB's current monopoly on live Premiership football has been smashed by the Irish pay-TV operator, Setanta. Sky had been expected to walk away with five of the six 23-game packages of rights available, and Setanta to get one. But Sky has secured only four packages - paying £1.314bn for them - and Setanta has won two, paying £392m for them.
The £1.7bn represents a massive, unexpected increase of 67 per cent on the £1.024bn the League earned the last time the rights were sold. Then, each game cost Sky an average of £2.47m each. This time Sky will pay £4.76m for each of its games and Setanta will pay £2.82m per game - overall the league will earn £4.12m per game. The avalanche of new cash will inevitably fuel an upsurge in spending on transfers and wages.
The League's TV money is allocated in three ways: 50 per cent is shared equally between the 20 clubs, 25 per cent is spent on prizemoney depending on finishing position and 25 per cent is used for "facility fees" depending on how many of a club's games are televised live.
Under the current deal, the equal share of TV money is worth £9m per club per season, plus £253,000-£343,000 per live game (depending on timing), plus £484,000 for each place in the League. Chelsea were the highest earners from this pot of money in 2004-05, making £30m, while the bottom-placed Southampton earned £14m.
Under the deals agreed yesterday, the highest-earning club will see its income from Premier League TV money alone jump towards £50m a year, while the bottom club will be guaranteed at least £25m.
For the Premiership's clubs, and especially players, this is all good news. England's top clubs will have greater financial muscle to be theoretically more competitive in Europe, and the players won't want for that spare Ferrari. The downside is that the yawning gap between the Premiership and the rest of English football has just gaped wider.
All Sky's 92 matches each season from 2007-08 will be shown as part of its sports channels subscription packages. Currently it shows 88 games on these, and 50 more on a pay-per-view basis. The four packages won by Sky comprise games at 4pm on Sundays, 1.30pm on Sundays, 12.45pm on Saturdays and a " medley" parcel of games spread through midweek and across the weekend.
Setanta's two packages comprise the 8pm Monday slot, the 5.15pm Saturday slot, and some other games on Saturdays and Sundays. Fans will need to subscribe to the Setanta Sports Pack, which is made up of seven channels carrying live games from leagues across Europe, to watch Setanta's Premiership games. The bottom line for a fan wanting every live Premiership match is that it costs around £44 a month now, but will cost upwards of £55 a month from 2007.
Setanta, which has a low subscriber base in the UK, has taken a calculated gamble that it can make the deal pay. Based on its annual outlay on rights fees and estimated production costs, it will need to recoup more than £150m a year in new subscribers' fees from 2007. Even allowing for around £70m in new income from pubs and clubs (a deal to share Sky's current £200m-a-year from this is imminent), it is estimated it will need 450,000 new customers to break even on its Premiership outlay.
Trevor East, Setanta's director of sport, said: "We are well known in Ireland and Scotland but we are a mystery in England at the moment and that is something we will overcome. This deal will form the cornerstone of our programming strategy going forward." Sky has first pick of the best games but East added: "All the best matches will not be in packages A and F [which Sky won]. We are delighted to have Monday night and Saturday tea-time."
The Premier League's annual domestic rights revenue of £589m from 2007 will easily put in the shade the £412m per year paid to its French counterpart, Ligue 1, by Canal Plus, and keep it well ahead of TV earnings by Italy's Serie A, Spain's La Liga and Germany's Bundesliga.
When revenue from highlights - from the BBC or ITV - and foreign rights' are added, the Premier League expects to make around £2.3bn in total from TV and other broadcast media in the three years from 2007. The comparable figure last time was £1.6bn.
On the up Value of TV deals per season in Europe's biggest leagues
* ENGLISH PREMIER LEAGUE £569m a year (three-year deal - 2007-2010 - worth £1.706bn with Sky and Setanta)
* FRANCE LIGUE 1 £412m a year (three-year deal, to 2007, worth £1.236bn with Canal Plus)
* SERIE A, ITALY £348m for current season
* BUNDESLIGA, GERMANY
£288m from next season
* LA LIGA, SPAIN
£206m for current season
Turn on, tune in: Who got what in the great television auction
SKY PAID £1.314BN FOR FOUR PACKAGES
Package A: 23 matches shown at 16.00 on Sunday.
Package B: 23 matches shown at 13.30 on Sunday.
Package E: 23 matches shown at 12.45 on Saturday.
Package F: Seven to 13 matches on midweek evenings/bank holiday and 10 to 16 matches at 12.45 on Saturday and 16.00 on Sunday.
SETANTA PAID £392M FOR TWO PACKAGES
Package C: Minimum of 12 matches at 20.00 on Monday, the rest either at 13.30 on Sunday or 17.15 on Saturday or other times.
Package D: Minimum of 18 matches at 17.15 on Saturday, the rest either at 13.30 on Sunday, 20.00 on Monday or other times.
Fans will have to pay £660 a year for full live package
By Nick Harris
Armchair football fans, who currently pay £530 a year to guarantee access to every live Premiership match from home, will have to pay upwards of £660 a year from 2007 onwards.
To access 88 games via Sky Sports currently costs around £40 a month, or £480 a year, and watching Sky's 50 pay-per-view games costs a minimum of £50 a year on top of that. But from next year, viewers will need not only the Sky Sports channels (at a cost of at least £480 a year) to watch Sky's 92 live games per season, but also Setanta's Sports Pack channels (which currently cost £14 a month, and will probably be £15-plus by 2007), to watch Setanta's 46 live Premiership games per season.
This appears to make a mockery of the European Commission's intervention to break Sky's monopoly and force the Premier League to sell at least one pack of rights to a non-Sky broadcaster. The rationale behind that move was to increase choice for consumers and - theoretically at least - bring down prices, but that latter result has not been achieved. Yet the outcome is not just down to the EC, but Setanta's desire to get a foothold in the market.
Setanta argues fans will get much more than Premiership football for their money, including live games from leagues around Europe.Reuse content