TV GRAVY TRAIN SET TO BE DERAILED

Last updated : 04 March 2003 By editor
Vivek Chaudhary
The Guardian

A leading City bank has warned that Premiership clubs will be starved of cash if the European Commission gets its way over changes to the rules on how football television rights are sold.

The EC has issued a statement objecting to the way the Premier League negotiates exclusive contracts with TV companies for the broadcast of live matches and highlights, claiming that the practice is restrictive and unfair.
But Credit Suisse First Boston has warned in a report about football finance: "If regulators force the league to sell more content and to carve out rights for terrestrial-only broadcast, we would expect content prices to fall even more sharply. Although an end to exclusivity would marginally dilute Sky's [appeal to sports fans] we think it too little to have an effect on its ability to attract [them] to its pay-TV offer.

"We consider the football clubs to be the likely losers from regulatory changes along these lines, owing to the likely effect on content prices."
Concerns are increasing that, if the EC gets its way, then big clubs such as Manchester United and Liverpool, which can attract large audiences, would benefit because they could negotiate individual deals with TV companies while smaller clubs such as Charlton Athletic and Southampton lack such broad fan appeal and would suffer.

The Italian season was delayed by two weeks last autumn because smaller clubs had not been able to close TV deals, and increasingly the concern here is that, if the EC is successful, then the Premier League will be affected in the same way as First Division clubs were after the collapse of ITV Digital last summer.

A spokesman for the Football Supporters Association said: "It is vital for the future of English football that big clubs are not allowed to negotiate their own deals. The current system ensures that there is healthy competition and this is good for the game and good for fans. The EC does not really understand football."