Quantcast

Football must wait for the financial final act

703

Interesting financial news from Deloitte that FA Premier League clubs turned a profit in season 2013-14, the first time the combined results of the top 20 clubs in England have been in the black for 15 years.  The reason for the £190m surplus was a 29% increase in revenue, largely as a result of the-then new TV deal, which runs until summer 2016.  Wages rose only 20% that year.

Clubs will be happy to have stemmed the losses, although the first year of a new TV deal is always their high water mark, but the underlying bubble remains a problem.  Income cannot continue to rise at heady double-digit rates, shareholders of BskyB and BT will eventually see to that, despite the fact that next big boost from TV is already confirmed for season 2016-17.

The play to watch is not if or when a dysfunctional football sector gets its act in order, it’s when an almost-as dysfunctional broadcasting industry reaches equilibrium.  We’ve discussed before Sky’s absolute need for Premier League rights to secure their place as a prime broadcaster.  BT, Virgin, Netflix and others are busy eating into their movie, news and entertainment broadcast market.  It’s this need which is driving revenue towards the English Premier League.  Without English Premier League football, Sky are vulnerable.

Sky took the first step towards passing the financial pain of their new deal down the line to consumers this month in the form of a price increase.  The company have successfully done this before, many low income families are now paying £70 per month for satellite TV, and subscriber losses after previous increases have been almost non-existent.

Millions of people have high stakes skin in this game: subscribers, Sky and BT executives, their respective shareholders, Premier League clubs and the dependent ecosystem below them.  All the spinning plates have remained in the air, despite price increases through a recession, but one fundamental remains:

This is a bubble.

Speculators are confused when they only see a market inflate over a long period that it’s not a bubble.  The moment these TV deals become unaffordable to subscribers, or more likely, to the broadcasters, the bubble will burst.

Debts are high, profitability is here, but the underlying commercial pressures to stay in the league remain, so wage pressure will continue to eat away at available funds.  Those outside of the bonanza have to figure out how to compete for audience and players, while waiting on the final act.

Click Here for Comments >
Share.

About Author

703 Comments
  1. Pages:
  2. 1
  3. 2
  4. 3
  5. 4
  6. 5
  7. 6
  8. 7
  9. ...
  10. 19

  1. How sad to hear of those lost souls aboard the airbus plane

     

    that crashed in the French Alps appears to have been caused by

     

    the co-pilot deliberately crashing the plane.Absolute tragedy

     

     

    RIP to all those who perished

  2. Jungle Jim Hot Smoked on

    “overseasbhoy

     

    12:01 on

     

    26 March, 2015

     

    Don’t want a bubble – I want a treble.”

     

     

    Over Ibrox Way it is called a `Trouble`

     

     

    Cheerio for now,

     

    JJ

  3. Moonbeams…from previous.

     

     

    I just finished Sons of Anarchy last night funny enough.

     

     

    Good watching.

     

     

    Charlie ***nam csc

  4. For all those wantin gto blow the SKY\BT bubble.

     

     

    Purchase an Amazon Fire TV box. Deals done at 69.99, 79.99 although I got mine fopr 59.99.

     

     

    Upload Ikano, Kodi and Genisis plugins. Simple instructions on youtube.

     

     

    Box Sets

     

    Movies

     

    Sport

     

     

    Add ons availble via Genisis.

     

     

    Bob’s your uncle.

     

     

    So I’ve heard…

     

     

    MWD said AYE

  5. The other side of what might lead to subscriber rebellion on Sky is the quality and competitiveness of the EPL.

     

     

    Strip away the trimmings and many games are poor fare to which the need to stay in the EPL contributes.

     

     

    Newcastle for example have that as their success target.

     

     

    The Sky enticement is killing the product.

  6. Careful With That Tax, Moonbeams on

    Champions league is the bench mark for football teams ..

     

     

    English teams have yet again shown they’re inferior to their continental opponents .

     

     

    Even the English will start realising that soon, and stop paying Murdoch’s over hyped product.

     

     

    Give it two years .. Tops!

  7. GlassTwoThirdsFull on

    Paul,

     

    The problem is that the broadcasters are now in phone and broadband too. People might cancel their subscription TV, but they can’t do without broadband.

     

    The companies can spread the price rises across all services they offer.

  8. blantyretim is praying for the Knox family on

    Has anyone received an email from Aldo who used to post on Cqn,?

     

     

    Think his account has been corrupted

  9. mike in toronto on

    Geordie Munro

     

     

    I’m a big fan of SoA…. but, recently, been watching The Wire …. some of the best acting/characters I have ever seen on TV. Superb. Highly recommended, if you haven’t already seen it.

  10. Armed robbery in a Napoli supermarket yesterday.

     

     

    One dead and nine injured/wounded.

     

     

    The two perpetrators were ‘Carabinieri’ – cops.

     

     

    Mental.

  11. Auldheid

     

     

     

    12:33 on 26 March, 2015

     

     

     

    The other side of what might lead to subscriber rebellion on Sky is the quality and competitiveness of the EPL.

     

     

    Strip away the trimmings and many games are poor fare to which the need to stay in the EPL contributes.

     

     

    Newcastle for example have that as their success target.

     

     

    The Sky enticement is killing the product.

     

    =============================================================

     

     

    Maybe it’s the socialist bit of me but the very notion that the beautiful game is a product and is now fully ‘marketised’ has killed a lot of it for me.

     

     

    Even the controversy in football is now part of the marketing. Hence evrythin gets sensationalised and all perspective lost.

     

     

    It’s a sport, a leisure pursuit, at it’s very best an art form and a part of what makes life meaningful outside of doing the things we need to simply survive. It is also at times an expression of communal identity. But it lost a lot of that when the TV marketing men moved in.

     

     

    Bill Hicks was spot on about Marketing people. And I think that’s what’s happened to football in large part. A lot of the natural competitive elements have been lost. Geordies used to realistically dream of getting a manager and palyers in place who could make them potential league champions, the Sheffield Clubs and others should be much better placed without the intervention of the massive money to be forces in English football. And all because the money men went after the ‘soccer dollar’….

     

     

    In my humble opinion.

  12. Paul67 et al

     

     

    EPL supporters are protesting today, outside a hotel in London somewhere, against the cost of attending away games, predatory pricing etc. Not quite manning the barricades it has to be said, but surely one of the first times fans have taken their case direct to the ruling bodies.

  13. GlassTwoThirdsFull, phone and broadband alternatives are abundant. These markets will not hold people to Sky.

     

     

    Celtic Mac, pleased to hear that. The EPL could cut/eliminate ticket prices without harming their business model.

  14. Joe Filippis Haircut on

    Sad that all those passengers died because the co-pilot appears to have committed suicide may they rest in peace and may perpetual light shine upon them.

  15. BOBBY MURDOCH'S CURLED-UP WINKLEPICKERS on

    PAUL67

     

     

    Indeed it is a bubble,and unsustainable. But foreign markets have an appetite for it,and a huge potential audience.

     

     

    That’s why companies pay fortunes to be associated with the best-marketed league in the world.

     

     

    These days,few can be bothered to go down to the pub to watch a match,five years ago you struggled to get near a bar during a game. That will happen in households too.

     

     

    As a result,the domestic tv money will taper off.

     

     

    But the overseas market will remain for a good few years afterwards.

     

     

    I’d love to piss on the EPL chips,but bursting their bubble is a long way off.

  16. GlassTwoThirdsFull on

    Paul67 13:10

     

     

    GlassTwoThirdsFull, phone and broadband alternatives are abundant. These markets will not hold people to Sky

     

    ———–

     

    Maybe – but people tend to go for the simplicity of the packages.

  17. Geordie Munro on

    Mike in Toronto,

     

     

    Cheers neebs. I’ll get there soon.

     

     

    I love the ol TV box sets. I prefer them to movies.

     

     

    I can’t do the weekly thing though. It’s gotta be a good few at a time :)

     

     

    HH

  18. The Battered Bunnet on

    Paul,

     

     

    Your observations on the competition for content fuelling the growth in EPL revenue is valid. Even the BBC (bless) were fooled into a £207M bid for highlights despite there being no other competitor bidding – they’d have got them had they bid but a singe pound.

     

     

    I think with near on 25 years of continuous growth, the continuing roll out of new broadcasting platforms, and the consistent profitability of platform operators, that your scheduled bubble-bursting party should be rain checked.

     

     

    Since 2008 we’ve had a crisis of Capital, and endured a consequent crisis in earnings, and still the demand remains, and the price of satisfying it increases.

     

     

    With the best will in the world, it’s not going to happen anytime soon. The bubble’s not for bursting.

     

     

    Why?

     

     

    Because it’s not a bubble.

     

     

    Looking at it as if it were serves only to redirect our energies away from the big question we need to answer: What to do about it?

     

     

    In my view, of course.

  19. GlassTwoThirdsFull on

    Winning Captains

     

    A wee bit harsh on Berti. Yeah – he did do badly, but a bit of context wouldn’t have gone amiss.

     

    Granpa Broon had ran the old team into the ground with seemingly no thought of the future.

     

    When Vogts came in the old guys had all retired. How many players were there under say 28 with double figures caps?

  1. Pages:
  2. 1
  3. 2
  4. 3
  5. 4
  6. 5
  7. 6
  8. 7
  9. ...
  10. 19