Football League Clubs See Revenues Slashed In New Television Deal

The Football League is collectively looking at a major decrease in television revenues when their current deal with the BBC expires, according to the Guardian. With current revenues at almost £90M per year and the recently negotiated new contract with Sky coming in at £65M, the league is looking at a cut of nearly a quarter over the next few years. Sky, who were unopposed in the bidding thanks to the collapse of Setanta and the cutback in the BBC sports budget, will be showing 75 matches as well as 15 Carling Cup games and the playoffs, up from the BBC’s ten Championship games and the Carling Cup final.

This is very good news for Football League fans who already get Sky, but not so great for those who don’t subscribe to a pay-TV service. However, it’s obviously a major loss in terms of operating revenue, and the likely result is that the overall quality of the product will go down as less-expensive players are recruited. Football League chairman Greg Clarke admitted that the climate was troubling, but highlighted the fact that the deal does at least provide some long-term stability:

This has been a challenging climate in which to negotiate television rights, given the state of the economy and the lack of competitive tension in the sports broadcasting market.

I am confident that our clubs will take heart from seeing such a significant ongoing investment in their competitions, despite a reduced level of broadcasting income, as it provides financial certainty in uncertain times.

One of the more interesting repercussions of the new deal, which will be in effect for the three years following the 2011/12 season, will be the increased importance of parachute payments from the Premier League. Teams relegated from England’s top flight are given a portion of the Premiership’s television money over the next few years, ostensibly to make up for the fact that they’re losing that revenue despite having a Premier League-calibre roster and facilities.

Realistically what this does is make it much easier for recently-relegated teams to go straight back up, creating a static ‘yo-yo’ division caught between the Championship and the Premier League. With the rest of the league suffering reduced revenues in the new television deal, the parachute payments are going to become significantly more important, which means that there’s yet another incentive to achieve promotion as quickly as possible for these teams.

So, although we get to watch more lower league games, we see yet another case of the playing field being treated towards the elite few. It would be nice if the expanded coverage eventually brought more money into the Football League than every before... but don’t count on that.