Premiership clubs set to lose £150m over TV deal

Click to follow
The Independent Football

Premiership clubs have been warned they could lose out on up to £150m in potential income from domestic television rights over the next six years following their compromise with the European Commission.

The deal between BSkyB, EC regulators and the English Premier League calls for the television company to sell rights to games from the bottom tier of matches, according to sources. The Premier League divided its 138 games per season into four packages, all of which were won by BSkyB in August. Under a deal reached with the European Commission, the company agreed on Tuesday to sell up to eight high-calibre matches to another broadcaster. But those games will be drawn from the fourth, and cheapest, tier and will be aired on Saturday evenings in the United Kingdom. In return for the loss of exclusivity, Sky will receive a discount on the £1.02bn it agreed to pay over three years.

Club chairmen are confident the Premier League got the "best deal it could" in securing the future of their next £1bn deal with BSkyB. And industry analysts have welcomed the "sensible outcome that should secure the stability of football's finances for the next three years". There is still the chance that the value of other rights, such as "video on demand", mobile phones and overseas coverage, will increase to help ease any domestic shortfall.

In essence, the outcome is far better than the scenario envisaged by some observers - namely that the EC would judge that the deal with BSkyB breached their monopoly laws. Instead, the Commission allowed the deal, which comes into force next summer, to go ahead, albeit with the one major change. Sky will have to sub-tender eight games a season for the next three years, with the BBC and ITV expected to bid for the rights to those matches.

Vinay Bedi, a football analyst at the stockbrokers Wise Speke, said: "We are awaiting Sky's response and whether they will seek to recover some of their outlay. If they do, I wouldn't expect this to be any more than £50m over three years, which would equate to about five per cent, as the BBC and ITV wouldn't pay anything like the same amount for a live match. However, it would still be fair to say that the Premier League and Sky should not suffer a great deal from this, especially compared to what could have been imposed on them."

Nevertheless the potential hit for Premiership clubs rises in the light of the Commission's announcement that there must be at least two major broadcasters involved in the next TV deal from 2007. It is unlikely that Sky would pay as much for non-exclusive coverage, while the value of any live rights package won by a terrestrial channel would almost certainly be reduced.

However, the Portsmouth chairman, Milan Mandaric, said: "It is not a bad deal, and it will give the clubs good financial support. It's better we made the deal than get tied up in legal proceedings. I'm sure that Sky will work closely with the League to ensure this makes good business sense for them and the clubs."