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Football must wait for the financial final act

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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.

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  1. Correction: should have been to Unthank Road

     

     

    Thunder Road: If you are still about. BMCUWP Passed on my contact details to you so feel free to contact me and I’ll help you whatever way I can.

     

     

    Weallmakemistakescsc

  2. TD,

     

     

    My mistake, yes I believe they are moving to Westgate the former Hilton where Elvis got his start. Good choice too as I always stay there when in Vegas

     

    Him and Jackie do a great job for the NA guys.

     

    The only reason I asked, was when you posted, I thought you meant the plans had imploded, lol, and I have a connection with Caesar’s

     

     

    HH

     

    gsu

  3. west of ireland csc on

    huge rangers fans gregory campbell mp east derry asked in westminister on 23 march

     

     

    To ask the Secretary of State for Business, Innovation and Skills, if he will bring forward legislative proposals for regulating the sale of ouija boards.

     

     

    this in 2015

     

    ffs next thing the dup man will be looking for the reenactment of witchcraft legislation

     

     

    this is is the mindset we are dealing with

     

    still stuck in 1690 with absolutely no intention of leaving it

     

     

    above thanks to phil macgillabhain

  4. sixtaeseven - Gardez la Foi on

    It should be interesting in the coming days to see how Paul Payton is treated in the media compared with what John Guidetti has endured.

     

     

    Although I think we all know how that will go…

     

     

    BTW, I get the impression that PP is a stick-on to be lining up the huns next season.

  5. We all in our innocence thought that the Sky and cash rich EPL would eventually collapse when the World recession hit but both are still there and continue to thrive better than ever, with even relegated clubs standing to make a 100 million – fantasy stuff.. The downside being that English born players cannot get into the top clubs which is having a negative effect on the International team. I don’t watch soaps or cop shows but I like my sport and documentaries so have both Sky and BT packages.

     

     

    I’m not sure if this has already been mentioned on the blog but the officials who opened the gates of Murrayfield until all hours to allow thousands of Irish fans back into the ground to watch that fantastic climax to last weekend’s rugby Championship deserve to be congratulated. This was a party to beat all parties.

  6. Livornobhoy

     

     

    Wasn’t being totally serious! Islington got the rep due to the fact that Tony Blair had moved there, Richmond Place I think, from Hackney in fact, not long before the 1997 election. After moving into No.10 they sold the Islington abode, for double the money they had paid for it. Islington was also where Blair and Brown cooked up (well it was a restaurant in Upper Street) the succession to the recently deceased John Smith.

     

     

    Agree re Jeremy though, sound man, North London’s answer to Dennis Canavan.

  7. bournesouprecipe on

    Bada

     

     

    STV is the unofficial Sevco TV Channel that only show goals against Celtic. A very different ‘animal’ from STV online news.

  8. bournesouprecipe on

    Greensideup

     

     

    There were some eager in the ole FS at CP at the 4-0 humping ;-)

  9. I’m astounded of forehead that Paul Paton is alleged to have assaulted big Zaluska. I only know him from his appearances on the premiership pitches of Scotland and to me he appears to play in the Corinthian spirit. He seems to be unlucky in that he gets caught up in the odd ‘stramash’ and I’m sure that’s all that’s happened in the lane…

     

     

    ayerightCSC

  10. I don’t think Rangers will win promotion to the SPFL next season and I think John Guidetti will eventually pen a deal with Celtic.

  11. sixtaeseven - Gardez la Foi on

    hankray

     

    I concur.

     

     

    Sevco got the debt and Celtic… Guidetti.

  12. The small and medium-sized clubs in the EPL will be getting 75 per cent or more of their income from TV next season. My home-town club, Stoke, project 83 per cent of their income will come from TV (ticket prices frozen for seven years, some season tickets available for less than £300). If Bournemouth reach the EPL they’ll get 90 per cent of their income from TV.

     

     

    The question arises – who actually runs football clubs and leagues when one or two, literally one or two, companies supply the money that keeps the whole thing going?

  13. bournesouprecipe on

    hankray

     

     

    An unseen handlebarred handsome fenian billionaire bar steward that he is.(⊙_⊙)

  14. hankray

     

     

    Your red top jargon is about 2 years out of date.

     

     

    You must surely know that players “ink” deals noo, not “pen” them.

     

     

    EG. I inked a new Sky contract.

     

     

    Ruperts CSC

  15. ExSlaemuirBhoy on

    Re the co pilot on the German plane , he’ll be judged by God and God alone just like the rest of us when our day comes. Tradgedy

  16. !!Bada Bing!! on

    exslaemuirbhoy

     

     

    18:58 on 26 March, 2015

     

     

    Re the co pilot on the German plane , he’ll be judged by God and God alone just like the rest of us when our day comes. Tradgedy

     

    Not looking for an argument, over a very serious subject, with much of the details unknown, would you be as philosophical if he murdered one of your family mate.?HH

  17. RWE…….

     

     

    >03:00 a.m. here and I am still checking flights whilst lurking………..

     

     

    TBM

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