It was here that it struck me - as a student of Media and Communications, I have learnt a great deal about Media Monopolies and plurality, encompassing legal aspects as well as other factors such as public scepticism towards large media outlets. Arguably, in no other organisation is this scepticism better reflected than News International - since the turn of 2010 it seems like Rupert Murdoch can't lift a finger without creating a bigger scandal than Paolo Di Canio at a Women's Institute meeting - first there was his abandoned pursuit of a controlling stake at Sky, then there was the phone-hacking scandal and Leveson Enquiry, which threatened to bring the whole groaning empire crashing down around ol' Rupe's wizened ears. However, it seems that one element of Murdoch's influence that the British public, and consecutive Governments, have been willing to not only tolerate but sponsor, has been the overwhelming influence of Sky on Football in this country - especially considering the ties between the sport and the British people. Football is not only by far the most popular sport, both in terms of active participation and consumption, but it is a well-established fact that Football plays a vital role in the economy of this Country. However, one single broadcaster has been allowed a position of such incredible influence that it could be argued it has not only revolutionised the way British audiences consume sport, but has changed the Game itself forever in the process.
I'll save you the rambling history of Sky's evolution that those marking my dissertation will get to enjoy over the coming weeks, but it is important to note that the company utilised football as not only a cornerstone of its coverage, but as the very deciding factor between success and failure, and the loss of billions of pounds of funding. It is for this reason that Sky staked so much in the Premier League so early on - they HAD to make it work at all costs, and this meant a better deal for football clubs than had previously been offered by BBC and ITV, as well as exciting new opportunities for viewers in the UK. This early spirit of excitement has, I would certainly argue, been a key component in the success story of Sky's football coverage, as the company has been at the cutting edge many times: Player-Cam, Fanzone, Red-Button match choice, HD and now 3D broadcasts - the list goes on.
As Sky grew increasingly powerful in the 1990s, its bosses recognised the centrality of Premier League football to the future success of the company. During this period, the value of television broadcasting rights increased four-fold, even without viable competition for Sky to bid against. By the end of the Century, Sky and Football had forged a link that had rendered the two virtually inseparable - and it is a link that remains intact today. The deals between the two were so mutually beneficial that no-one could possibly lose. Clubs were getting richer and richer, and the Premier League became the shining beacon of all possibility - life for all clubs became a perpetual desperate pursuit for the attainment and retention of Premier League status. Of course, any sport that has ever existed has revolved in some way around being the most successful, but never before has even being present in the top division without ever experiencing the slightest possibility of actual success been as enticing for fans, Chairmen and players alike.
The money involved in the Premier League is simply staggering. It's no secret that the relationship between the game and Sky has evolved to the point where, in 2013/14, the broadcaster will begin the first year of a £3bn contract that will last for the next three seasons. Even in a sport where growth has been unbelievably fast, this represents a jump of mesmerising proportions. This season, the team that finished bottom of the BPL will receive £60m in revenue for their position - more than was earned by Manchester City for winning the title just two years earlier. This is a frankly startling figure which truly highlights the rate of growth in the Premier League. When foreign investment, as well as that from BT Sport, the new rival to Sky's coverage, is taken in to account, the 3-year contract totals over £5bn - compared to £304m Sky paid for exclusive coverage twenty years ago.
This may all sound squeaky clean and peachy, and that's what the Premier League and Sky would have you believe. However, when one examines the real figures that lurk underneath the shiny press-release exterior, it is not hard to see that there are serious problems on the horizon.
What Has Gone Wrong
Unbelievably, it would appear that over the past twenty years, clubs across the world have decided not to merely sit on the vast sums of cash being thrown at them by TV broadcasters (no jokes about Arsenal here, please!), but rather, they have decided to take the unusual step of reinvesting this revenue in order to make themselves more successful. Before the proliferation of TV revenue, there was a financial hierarchy that was largely premised on success. In this system, more successful clubs like Manchester United, Liverpool, Arsenal, Leeds and Newcastle were able to afford higher transfer fees and wages for better players. However, if you slap £50m in Tony Pulis' hands, things will change somewhat. Some may be thinking that the increased financial capability of a wider variety of clubs will have proved to be a good thing, levelling the playing field between the biggest clubs and the rest, but they would be wrong. What has happened in stead, is that the hierarchical structure still exists (albeit with other clubs at the top of the pyramid), but these clubs have had to source vast sums of additional revenue from elsewhere (leading to the proliferation of foreign ownership). In addition to this, we now see clubs like Stoke, Norwich and Fulham with £40m to spend every single summer - this has not reduced the divide, it has merely created an even bigger and longer-lasting one between the top divisions and the lower leagues. In a system where everyone can afford to pay more, everyone does pay more. It's as simple as that.
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| "He's good, but can we afford his wages?" |
Now, in order to even stay up with the pack, clubs have to push themselves to the brink of financial disaster. Take Aston Villa, for example. This is a club that, in all likelihood, will not experience real success within the next decade, and the retention of Premier League status will satisfy the club's owners during this period. However, in 2011/12, Villa spent 94% of the club's total revenue on player wages alone. This means that only 6% of the club's revenue from TV, merchandise, ticket sales and commercial streams was available for everything else that running a football club entails. The story is even more serious in the Championship - in the same year, nine clubs spent more than 100% of their revenue on player wages in the desperate pursuit of Premier League status. If the gamble pays off, the rewards can be tremendous - as clubs such as Cardiff City, West Ham and Stoke have discovered. However, if this approach doesn't work, even within one season, very quickly promotion contenders and apparent Premier League main-stays can fall by the wayside - Leeds, Birmingham, Charlton, Portsmouth, Middlesbrough, Bradford to name just a few who have experienced this fate. Even Norwich City and Southampton had to plum the depths of League One before starting their resurgence against all odds. The current financial system in Football is absolutely unsustainable, of this there can be no shred of a doubt. Year on year, clubs pile debt onto debt in the knowledge that next year, an even bigger cheque will arrive from Sky to tide them over for another season. The only way I can adequately describe the situation is to compare this approach to Doctors treating patients on a cancer ward by giving them a make-over and a new outfit every year. It is, frankly, absurd. The fact that these clubs are not just private entities that can falter without further repercussions is the most troubling aspect of all - local communities such as those surrounding the aforementioned clubs have been hit hard by falling business after the loss of Premier League football in the area - and worse still could be on the way.
What May Still Be Yet To Come?
Much has been made of the relatively quiet start to the Premier League campaign, especially in comparison to the cricket-scores we have experienced over recent years. Rarely do we see a Ford Super Sunday pass by with two drab nil-nils, however this kind of event is becoming increasingly familiar. Due to the increased capability of every club, we have experienced a levelling-out process in the Premier League where most clubs between, for example, 6th-17th in the league table are of a similar ability. This will inevitably lead to more closely-contested and tactical battles, which does not necessarily make for good viewing.
A worrying concept is the notion that the system that Sky has helped to create through its incessant funding could ultimately be the thing that undermines the relationship between the broadcaster and the Premier League, and potentially could lead to the decimation of the League in its current format. If, for example, the next three seasons pass with increasingly regular 0-0 scorelines, fewer goals and less exciting content, it is unlikely that Sky and BT Sport will be clambering to offer £5bn at the next round of rights negotiations. It is very likely that in this situation, the scale of funding would decrease for the first time since the Premier League's inception, with potentially damaging consequences. You might think that the loss of even £500m worth of value for BPL screening rights would not be too damaging, and you would be right if we lived in a world where football clubs operated with sound financial planning and adequate contingency preparation. However, in the current system, where Premier League clubs make a combined net loss of on average £200m a season, Championship clubs lose £6m each per year and League One revenues have decreased year-on-year for three seasons, it is unlikely that this change could occur with minimal damage. This loss-making behaviour is occurring in a time of increasing revenue, when clubs should be feeling the benefits of surging profits.
Furthermore, it is potentially damaging to the Premier League that other Divisions in Europe appear to be growing in comparison. For example, German football appears to be experiencing something of a renaissance, with an all-German Champion's League final in 2013 and Bayern Munich building in capability to become one of the very finest club teams in the world. Spanish teams continue to attract the greatest players in the world, including one of the Premier League's primed assets, Gareth Bale. Now, the Premier League must also deal with a growing interest in French football, as PSG's growth is now matched by huge financial capability at Monaco and an interesting League that has seen seven different Champions in as many seasons. Should consumer interest be diverted away from the Premier League and towards any of these competitors, it could also spell trouble for fans of English clubs. Sky already screen more La Liga games per season than Premier League (a rather surprising fact), so it is certainly not impossible.
What Can Be Done?
Unfortunately, it is seemingly hard for consumers to do anything, short of overhauling Clubs so that the financial responsibility lies with fans who can keep a more stringent eye on expenditure. However, it would seem that the greatest revolution Sky has created since the inception of the Premier League in 1992 is the change in the football consumer - no longer are we satisfied with Jason McAteer and Ray Parlour - we fume if our side don't sign a £10m+ player every season. Moreover, we are increasingly bored by tactically interesting encounters if they don't involve nine goals before half time. It is hard to blame Sky for these changes when it is we ourselves who have contributed to its existence too. I simply worry for what the future may hold if the precarious balance of the English Football system is affected in any way.
