The television deal: Sky more likely to adjust terms than switch off entirely

Graeme Macpherson

Football Writer

Friday 15 June 2012

THE increasingly far-reaching Rangers story has brought about a mass yearning for a simpler life.

Third division football at Ibrox would likely attract television coverage

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Graeme Macpherson

It seems the natural response from fans frustrated with incessant chatter about CVAs, newcos, court cases and voting structures is an almost nostalgic desire to return to a point when all they had to worry about was how their team fared on a Saturday afternoon. It explains why a section of the Rangers support, sick of all the turbulence, are warming to the idea of their newco club starting afresh in the third division.

There is a similar mindset developing when it comes to Scottish football's relationship with television. There is a school of thought speculating that, should the Rangers phoenix club start life in the lower leagues, Sky could walk away from the five-year deal they and ESPN agreed last November. Those keen to see a return to traditional values have viewed that as a chance to free football from the shackles of television scheduling, to sacrifice the income in return for matches kicking off every week at 3pm on a Saturday. The belief is that, with games no longer live on the box, crowds would improve to offset the financial loss. Yet those paid to assess the situation with an analyst's eye see it differently. Stephen Morrow, a football finance expert from the University of Stirling, believes that, even if Sky and other broadcasters were to turn their backs on the Scottish Premier League, it would not result in any dramatic upturn in supporters paying at the gate."For all that the clubs have become dependent on TV money, in absolute terms it isn't huge sums of money," he said. "So there may be ways to look at how football is delivered. But we also have to be realistic; people are talking about making the game more attractive and getting a higher level of supporters coming to matches, but there is not a lot of evidence to suggest that would happen. "That is the rhetoric that seems to be going around but the reality is that the television companies will always pay some money to the clubs who then work it into their business models. It might be nice to go back to other models where football is not reliant on broadcasting income but I don't think that's realistic."Faced with the prospect of no Old Firm matches for three seasons, Morrow believes Sky will look to renegotiate their deal, rather than withdrawing entirely. "The current coverage is dominated by the Old Firm fixture as those are the games that pull in the audiences from across the UK," he said. "If you look at the games not involving either of the Old Firm, you tend to get very small audiences. It's almost a given that if you take away the very thing that makes this product attractive to Sky I can't see how they would consider agreeing to the same deal. "But I would imagine that Sky would want to still show some loyalty to the SPL and look to get around the table to renegotiate the deal. I don't see them walking away entirely but it doesn't make sense for them to offer the same sums for a markedly smaller audience."Sky and ESPN have committed to spending £80m on SPL rights over five years, a drop in the ocean compared to the £3bn deal agreed this week by Sky and BT to show the Barclays Premier League. But while the sums received may be relatively pitiful in comparison, they still make up a large part of many clubs' budgets. "We always focus on England as they are the country in closest proximity and the new deal they have secured is staggering," said Morrow. "Clubs who end up being relegated from the Premier League will make more than Manchester City received for winning the league this year. So the Scottish deal is like crumbs off their table. "But those crumbs are very important to most SPL clubs and could be the difference between them surviving or not. There are a few whose debt levels are already significantly higher than their turnover, and if you, potentially, take away a significant chunk of that turnover then it could place some in real peril. In some cases we have some clubs surviving right on the margins and then they suddenly lose £1m of TV income then that becomes really, really hard."They would then have to look closely at their cost base and see if there are any ways to recoup that money elsewhere, although most areas of the business will already have been compressed. So it's difficult to see how they replace that magnitude of income."The SPL's loss could potentially be the Scottish Football League's gain. A market largely ignored by live television, save for the occasional BBC Alba offering, could find itself in demand should Rangers be forced to slum it in the lower leagues for several seasons. "That could be one of the few positives to come out of this Rangers story, if television money is re-distributed to the smaller clubs in the SFL who currently receive very, very little," added Morrow. "Pay-per-view hasn't had a great success in other leagues but if there was sufficient demand to follow Rangers around to various third division clubs then someone will surely take up that option."

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The television deal: Sky more likely to adjust terms than switch off entirely

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