The FA in England made upbeat noises yesterday after concluding a two-year TV rights deal with ITV for coverage of the FA Cup and England internationals, despite the £90m contract being a third less than the prevailing annual rate. This is the latest in a deflationary trend after the Football League in England secured a deal from BSkyB from next season at a rate 26% below the current deal.
TV money is still flooding into our nearest neighbours at a rate that would allow all Scottish clubs to pay their tax bills but the downward trend is welcome for those here trying to build and retain football squads. Although English football is awash with cash it is also heavily indebted with a compulsion to spend every penny earned. Downsizing, if necessary, will be a challenge.
The FA Premier League remains a durable TV property but you’ll find it harder to find analysts projecting income growth for the next deal, irrespective of the successful legal challenge to price fixing based on EU areas.
A weak pound has meant earnings from overseas rights have remained high compared to pre-crash times but with euro-area and other world economies so volatile neither exchange rates nor foreign demand can be regarded as stable. Economically speaking, English football has all the facets of a bubble, so far, one that just keeps on inflating…..