In the first quarter of 2012, Uefa will come to the market with what is arguably the most exciting new sports rights product since it created the Champions League from the old European Cup in 1992. That competition represents both the pinnacle of club football and a case study in the successful exploitation of commercial rights. Now Uefa plans to apply the same makeover to national team football.
European football’s governing body last year told its 53 member federations that by creating a kind of Champions League for federations, it could deliver a 67-per-cent increase in net revenues from the sale of media rights.
Uefa believes that the central sale of the domestic and international rights for the European qualifying matches for the World Cup and European Championship from 2014 onwards could generate €1 billion ($1.37 billion) in gross revenues, and €900 million in net revenues, over a four-year period. That compares with an estimated €680 million in gross revenues and €540 million in net revenues generated now by the federations’ individually-negotiated deals.
The commercial rights that Uefa proposes centralising include:
- All media rights, domestic and international, for: all national team qualifiers, including play-offs; two friendlies for each national association drawn in the two smaller qualifying groups of five, as opposed to six, teams; 10 friendlies for the host country national association.
- All perimeter board advertising.
- Other ancillary rights, such as match ball, tickets, hospitality, broadcast sponsorship.
Uefa, or an agency appointed by Uefa, would sell the rights for a four-year cycle, calling the product ‘The European Qualifiers’. The governing body has already hinted that it may keep the sale of the rights to the top eight to 10 markets in-house, as it has done with the sale of the rights to Euro 2012. Agencies big and small – including the industry’s big three of IMG Media, Infront Sports & Media and Lagardère Unlimited – are expected to be in there pitching for a share of the rights.
Uefa foresees a revenue redistribution scheme similar to that employed for its club competitions. Revenues would be divided into two pools: a “fixed pool” split equally between all associations, and a “market pool”, split according to the value of each association’s television market. From the projected €450 million net revenues per qualification cycle, each federation would be guaranteed €4 million from the fixed pool, with a further €238 million divided according to market share.
Some of those smaller federations which originally approached Uefa with the idea are hailing the scheme as a financial life-saver which will provide them with guaranteed income at a decent level for a four-year period. The six biggest federations, however, who feared that they might be worse off, sought cast-iron assurances from Uefa that their revenue would not fall. The FAs of England, Germany, France, Italy, Spain and the Netherlands were eventually won round. The pressure is now on Uefa to deliver.
Julien Bergaeud Director of Programmes and Broadcasting, Eurosport: "Any centralisation model is always open to criticisms of monopolisation and this situation would be bad for the sports viewer. With no encouragement of competition we could see a gap opening up between the price of the rights and their ‘real’ value, forcing broadcasters to pay more."
Jorg von Appen Partner, von appen | jens; and former VP Legal Affairs, SPORTFIVE: "The largest portion of the estimated revenues will be accrued from the major markets. How many media players in the major markets will be willing to pay €50 million or more for a package? And who is able to bid for the rights, given certain listed-event regulations in those markets?"
Thomas Martens CEO, Triumph Media Group: "It is clear that through increased revenues for national associations more money would be available to develop amateur and grassroots football. But the question for me is whether increased revenues would be partially neutralised by the ensuing national federations’ inability to bundle in other rights – such as friendly matches, youth team matches or the national cup competitions – to the national team ‘crown jewel’ qualifying rights."
Ben Speight Head of SportBusiness Intelligence, SportBusiness Group: "If this new product is to benefit football fully, Uefa should bite the bullet and sell these rights themselves to ensure it maximises the value – it has a new commercial division and information on the previous sales of these matches is available."
For the full debate see the latest edition of SportBusiness International published October 1.
