Wednesday, October 12, 2011

Liverpool are right to raise anomaly of TV rights – but it is La Liga that should change


Ostensibly, it appeared that Ian Ayre, the Liverpool chief executive, had given a series of interviews to coincide with the one-year anniversary since Tom Hicks and George Gillett were successfully ousted as owners.


Yet, deliberately or not, the story today is not the changes at Liverpool over the past 12 months but his call for the Premier League to allocate more of their £1.4 billion from overseas television rights to its most popular clubs.


As it stands, the Premier League markets its product collectively and broadly shares the income.


It means that Manchester United, with their vast global fan-base, benefits just as much as Swansea City or Wigan Athletic from the sale of television rights to 212 countries outside the United Kingdom.


Liverpool have understandably pointed out that in some other countries, notably Spain, clubs sell their rights on an individual basis. It means that Barcelona and Real Madrid can generate considerably more income from this specific revenue stream than any English club.


Yet it also means that the smaller clubs in Spain’s La Liga earn dramatically less than their counterparts in the Premier League.


As a whole, La Liga also earns considerably less than the Premier League. The result? Barcelona and Real Madrid are exceptionally wealthy and well-placed to dominate in Europe while the rest of La Liga begin just about every season playing for third. Indeed, over the past two years, no club has finished within 20 points of either Barcelona or Real Madrid.

In that context, it is easy to understand the temptation for the likes of Manchester United, Arsenal, Chelsea and Liverpool.


They are the clubs with the largest global fan-bases and, in theory, the most to gain from selling their television rights individually. The wider and more long-term question, however, is just why those clubs have developed such a vast worldwide fan-base.


All of the evidence suggests that it has really snowballed during the incredible booms years of the Premier League. And why has the Premier League been so popular? Because it is generally very competitive. Widen the gap between the clubs and that key quality would be lost. The Premier League certainly subscribe to this theory and are certain that it is the collective strength of all the clubs which underpins its vast global reach.


In his interview, Ayre cited the 80,000 fans who came to watch Liverpool in Malaysia, but would they really have been so aware were it not for the type of league his club plays in?


In any case, the hard reality of the situation is that it is not the Premier League who Liverpool have to convince of their case. To pass a change in the way overseas television income is distributed, they would have to persuade a two-thirds majority of their rivals clubs. That’s 14 of the 20 Premier League clubs. Given that Manchester United, Chelsea and Arsenal are all opposed to the idea, it is clear that there is little prospect of change.


If Ayre cannot convince those who would most benefit, he has no chance of persuading others to sign up to something that would reduce their income and further cement the dominance of the elite clubs. It should also be noted that Ayre’s comments have been met today with significant scepticism from around the country.


After all, with Liverpool having made such little progress on building a new ground and with their commercial revenues dwarfed by Manchester United, they are currently faced with limited options as they try to build their income.


Yet at a time when Uefa are introducing regulations relating to ‘financial fair-play’, Ayre was right to highlight the obvious anomaly of clubs like Barcelona and Real Madrid being able to sell their TV rights individually.


If Uefa are serious about financial fairness and introducing collective fiscal rules, they should surely also insist on a uniform method among the major leagues for selling their television rights. And it is the model of Spain’s La Liga which should be changed rather than that of the English Premier League.



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