The English Premier League looks set for another bumper increase when it sells its domestic broadcast rights next year. But what strategies are currently being discussed to try and replicate that kind of increase in the other big four European football leagues? Frank Dunne, Editor of TV Sports Markets, asked the decision-makers in Spanish, French, German and Dutch football at last month’s SPORTELMonaco.
SPAIN: Government Intervention – Javier Tebas (President, Liga de Fútbol Profesional)
Ever since I have been president, the fundamental objective has been to find a way to sell our rights collectively. We have discussed this at length with the clubs, and got to the stage where some of our clubs have agreed to it, but of course they could not agree on how revenue should be shared.
We had to find a solution, and for the 2016/17 season the rights in Spain will be sold by the league, and the distribution of the revenue will be clearly established by government law, so there will be no further arguments.
The clubs trusted me enough to do this. Maybe the day after the revenue is distributed they won’t trust me anymore, but we have signed this agreement with the government so that law can cover the distribution of revenue for collective sales.
The clubs don’t need to worry about whether or not to accept this distribution model – it is the law – and they will not be able to change what has been established within the framework of legislation.
The clubs trusted me enough to do this
It’s not possible, in any way, to equally distribute media rights revenue and to leave major clubs without money. The distribution will take into account social issues, the popularity of individual clubs, the number of international visitors to games and so on.
In the future you will see the gap between these clubs greatly decrease from what we see now as a result.
HOLLAND: Going it Alone – Frank Rutten (Chief Executive, Eredivisie)
When we reviewed our situation in 2007, we looked at the history of the Dutch football media market and saw how complicated it was. At that time, digitalisation hadn’t really taken off, and with cable covering about 80 per cent of the [Dutch] market, there wasn’t any serious competition [between broadcasters].
As a result, your home address determined who was going to be you cable provider, so there was no real reason for anyone to pay a strategic fee because there was no competition in the market.
When we found how unlikely it was that challengers would target the cable companies – having seen that previous challengers hadn’t been successful – we thought it would be good for us to create an alternative option.
That’s when we decided to create our own channel. Of course, some of our competition laughed about it at the time, saying, ‘come on, you’re never going to do it’. However, we had a huge advantage in that telecoms company KPN bought into the idea and decided to go down that route with us.
So if we ever want to take control of our own destiny, this was the moment to do it
That helped us enormously as it meant a company with national coverage was already willing to show our channel, so if the other existing players in the market would not follow suit, KPN would be able to sell it exclusively.
By including that in the tender process we created an element of certainty for us. The other bidders in the market at that time were the two major cable operators, and they only bid an amount that related to their market size. So if we ever want to take control of our own destiny, this was the moment to do it.
It’s important to remember that we were also creating value by building a company as well as a channel, and that is what we saw in 2012 when FOX International bought a 51 per cent stake in it. We have also been helped since by looking at just domestic Eredivisie rights, but also aiming to buy non-domestic rights such as the Bundesliga for the channel; we are making money in other ways to ensure sustainability.
FRANCE: Partnership Approach – Mathieu Ficot (Chief Commercial Officer, Ligue de Football Professional)
Collective selling is not a debate in France as it is determined by law, so we have not encountered the kind of discussions that have been going on in Spain and Italy.
In France, the collective approach gives stability and visibility to the clubs and helps us build a global brand. It also helps to bring added value to the average or smaller clubs in our league. So long as you have a sensible and effective way of redistributing the money, it is a very good model to use.
Some years ago we had the idea of setting up a bespoke league channel as a threat in a very difficult environment where we had no competition. However, when you are fortunate enough to be in a position where you have at least two strong bidders, launching a league channel is not necessary.
So long as you have a sensible and effective way of redistributing the money, it is a very good model to use
In France, due to legal constraints, we offer our rights on a maximum of four-year cycles, so the real challenge is to provide visibility to all of our clients.
On the one hand I see the NBA (National Basketball Association) sign a nine-year [domestic] media rights deal, but in the UK, the Premier League is forced by law to sign a maximum of a three-year deal. I can understand Sky’s concern as time flies, and as soon as you are one year into your deal, you have to make a decision on your business model to anticipate whether you will win the next round of rights.
What we have tried to do in France is to give our clients the longest time possible to anticipate a deal for the next cycle, enabling us to build a proper partnership with them.
GERMANY: Rewarding the Rich – Jorg Daubitzer (Managing Director, DFL Sports Enterprises)
When we used to talk about a league channel in the late 1990s it was purely theoretical, but with the number of distribution avenues, technical developments and OTT (over-the-top) platforms now in existence, it is a reality.
We are fully prepared to do such things should it be necessary – but it’s not a problem at this moment in time.
The idea that league revenue should be split equally between all clubs, however, belongs in a fantasy Disney world
The question is, what breeds sustainability the best? Do we build up together with a partner that has the right DNA for the media business, or do we go the risky way on our own?
In our view, the centralised selling issue is not a discussion – either from a regulatory or club perspective – as everybody understands that if you want to create a valuable product, it is essential to have collective selling. It gives all parties a platform for greater security from a financial perspective, and it is even more important if you want to build up a brand internationally as international media partners need [collective rights] even more than domestic partners.
The idea that league revenue should be split equally between all clubs, however, belongs in a fantasy Disney world. The reality is that we are not only living in a domestic world, but also in a world where European club football is very attractive and creates a lot of interest for us domestically.
For that reason an equal split [of league revenue] would not work as it would have a negative impact on some of the leading clubs in Europe