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Unintended consequences of a mega-deal

Posted By Albrecht Sonntag On 2015/02/21 @ 10 h 26 min In Governance | No Comments

[1]In terms of commercialisation, the Premier League is definitely a league of its own. By managing to sell the rights for live TV broadcast of games for a total of 5.14 bn pound [2] (almost 7 billion euro) for three seasons, it has reached a new dimension. You could almost hear the champaign corks popping in the clubs’ headquarters, but it is perfectly possible that this windfall may not only make all of them richer, but also have some unintended consequences.

On the surface, the first reaction is of course the panic that is rising in the other European leagues, especially among French [3]and German [4]clubs. Experience tells them that each substantial raise in revenue for the Premier League is very likely to be poured directly into players’ salaries and transfer fees. In boardrooms across the continent – with the exception of Madrid, Barcelona and Munich, presumably – presidents and managers are scared to death they won’t be able to compete any more with what Burnley, Hull or Stoke have to offer and that the most talented players will soon have left for England.

But this fear is no doubt exagerated. After all, the Premier League’s salaries and the UK tax system have always been widely more attractive in financial terms than any other European championship. Moreover, the aggregate number of players in the 20 top-tier clubs is not going to increase, which means that there is a limit to the number of would-be football migrants from the continent. The frantic search for new ways of imitating the Premier League is not only doomed to failure but not even necessary in the first place.

The real change inducted by this mega-deal could be summed up as ‘higher expectations’. Not necessarily from the worldwide spectator community – the Premier League already provides brilliant entertainment and drama enacted by global star players. What is much more likely to change is the regard of society. The way English football business is conducted will be scrutinised much more closely by the critical eyes of the public. The demand for good governance, the insistence on fair and decent treatment of employees, affordable ticket prices, redistribution of money to grassroots football, funding of community programmes. In short: now that football has really become big business, the call for serious, credible, and sustained Corporate Social Responsibility is a logical consequence.

In a forthcoming German book (to be reviewed on this blog in March), former DFB president Theo Zwanziger [5], recalls how, in 1992, ‘social responsibility’ all of a sudden became an issue in the world’s largest sport organisation: ‘Commercialisation played a considerable role, especially the earnings opportunities that arose from TV rights. In this context, it became clear that the DFB could not only cash in, but also had to be willing to assume social responsibility.’

And that was peanuts compared to the amount of money that is circulating today! Club owners in England are likely to insist on their ‘return on investment’, but society is likely to remind them that the revenues are generated by supporters’ investment, i.e. expensive pay TV subscription, in the first place. Chances are the clubs are not getting away with some nice alibi philanthropy this time around.


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URLs in this post:

[1] Image: http://www.free-project.eu/Blog/wp-content/uploads/2015/02/pounds.jpg

[2] sell the rights for live TV broadcast of games for a total of 5.14 bn pound: http://www.theguardian.com/football/2015/feb/10/premier-league-tv-rights-sky-bt

[3] French : http://www.theguardian.com/football/2015/feb/12/premier-league-nba-football-st-etienne-president

[4] German : http://worldsoccertalk.com/2015/02/18/bundesliga-considering-schedule-changes-to-compete-with-english-premier-league/

[5] Theo Zwanziger: http://www.ebn24.com/?p=15975&lang=en

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