The Premier League’s £8bn television deal has not only ushered in a new era of profitability for top clubs – it has also convinced a growing number of teams from lower divisions that it is time to negotiate their own game-changing broadcast contract.
Led by Derby County chairman and owner Mel Morris, some of the biggest clubs in the Championship and League One have united to lobby the English Football League (EFL) for a completely restructured TV agreement.
There has been a growing dissatisfaction among some of the EFL’s biggest clubs since it sold the rights to 1,693 a games-a-season across its three divisions and two cup competitions two years ago for just short of £90m a year.
This unrest was most visibly manifest earlier this year when Derby floated the idea of staging a friendly against Leeds United. It was an exercise designed to test TV companies’ appetite for the more storied sides in the second tier and, in turn, show the EFL how it could better monetise its matches.
With the EFL having an option to extend its current agreement with Sky beyond 2019, Morris is now spearheading a group of clubs who want the organisation to renegotiate.
At a meeting of the EFL’s member clubs in January, league bosses were presented with viewing figures showing that, for the first half of this season, the average Premier League match attracted a TV audience of 937,000 – a shade under three times more than the 354,000 average audience for EFL games.
That gap in audience size, some clubs argue, is not reflected by the relatively vast disparity in value of the leagues’ respective TV deals.
While even this season’s bottom Premier League club will receive £100m as a result of the broadcast bonanza, the average Championship club will get just £6.3m. In League One that figure falls to £1.3m and in League Two £900,000.
“The Football League survives on crumbs left over after the big TV companies have bought into the Premier League and not a lot else really,” Rob Wilson, sports finance professor at Sheffield Hallam University, told City A.M.
“What we’re seeing here is a handful of clubs saying what they’re getting from the Football League from those live games is not commensurate with what they’re worth.”
There is a counter argument, however.
The current TV deal may increase the financial chasm between Premier League clubs and Championship clubs, but revamping the EFL TV rights package by either selling off individual parts, such as the EFL Cup or the play-offs, could similarly increase the gap between clubs at either extreme of the EFL pyramid.
There is a value to the current arrangement, felt most keenly by League Two teams who only receive £900,000 from the current TV deal, but whose games are chosen for broadcast by Sky far less frequently.
“The best way to get the best possible value for your TV rights is to have competition and a great product,” Brighton chief executive and EFL board member Paul Barber said at the Sport Industry Group breakfast last week.
“The bigger clubs are right in the sense that they attract the biggest TV audiences and the TV companies want those clubs. There’s no doubt that they help subsidise the clubs further down.
“But if we take away the food and the nourishment and our pyramid starts to disintegrate then one of the unique propositions that we have in this country starts to fade away."
“I can tell you from working in North America and when I was with the FA travelling around the world, the one consistent thing that anyone ever talked to me about was the strength of the pyramid."
According to Richard Broughton, research director at TV analysis firm Ampere Analysis, the collected 1,693 games is part of the EFL’s appeal to broadcasters.
“There is always power in staying together in a group,” Broughton told City A.M.
“Having a very fragmented rights landscape with matches on all over the place is likely to be detrimental to the value of the league overall.
“It becomes much more difficult from a marketing and consumer perspective and ultimately they become they less valuable for the buyer. That could translate to lesser value for the clubs.”