Is the Premier League past its peak season?

Richard Scudamore is a hard act to follow

English football stands at a crossroads. Domestic broadcast-rights values have stagnated. Its five richest clubs have held discussions over a breakaway competition with their European peers. In England’s second-tier league there have also been clandestine talks around a breakaway competition. The national association wants to impose quotas on overseas players and FIFA’s ambitions for new World Cup and club-competition formats will have longstanding and far-reaching consequences for the English game.

All this without even mentioning the random factor being introduced to all British business interests by Brexit.

For years the Premier League’s march to becoming the richest domestic football competition in the world had seemed inexorable. Yet this is a confluence of potentially chaotic events that could derail English football’s previously serene advancement. 

That it should all coincide with the most powerful man in the English game stepping down after 19 years at the Premier League only amplifies the risk. The League’s executive chairman, Richard Scudamore, cleared his desk at Gloucester Place at the end of last year. The expectation had been that his replacement would be Susanna Dinnage from the Animal Planet channel. But having accepted the position, jitters got the better of her. 

She is not the only one to have been approached and turned the role down. The chief executive of BBC Studios’ commercial division, Tim Davie, rejected it. Gavin Patterson, who recently left his role as chief executive of the telecoms operator BT after six years in post, declined to move for the role altogether despite being favoured by several influential clubs. At a Premier League quarterly shareholders’ meeting, clubs were briefed not to anticipate an appointment before the start of next season. A job that paid Scudamore £3 million (US$3.92m) and more in a good year has become a hot potato no one seems to want to hold.

And with good reason. It is no exaggeration to say this is a succession of the magnitude of David Moyes replacing Sir Alex Ferguson at Manchester United. Scudamore is some act to follow. Like Ferguson’s at Old Trafford, his tenure at the Premier League must surely be regarded by impartial observers as an imperial triumph.

When he joined the Premier League at the end of the last century, it was in the middle of a broadcast deal worth £167.5 million (US$219.0m) a season. The domestic broadcast-rights deal Scudamore then negotiated for the 2001-2004 rights cycle more than doubled to £366.7m (US$479.3m) a year. During this season, the last of the current three-year cycle, it has been worth £1.712 billion (US$2.238bn). 

It might look like Scudamore is getting out at the market top. When in February the rights sales to BT and Sky were announced for the 2019-2022 cycle, they amounted to £1.488bn (US$1.945bn) a season. The sale of a package of 20 bank holiday and Boxing Day matches to Amazon will have added perhaps £80m more, according to the digital sports agency Seven League, with more tens of millions from the final package taking the total up to maybe £1.605bn (US$2.098bn).

This dip in domestic-rights values has, in nominal terms at least, been compensated by sharp acceleration in the rights values in some overseas territories. Football DNA understands that the U.S. has produced substantially more revenue and that in China there has been a fourfold increase in the agreed fees. 

But behind the growth in the reported top-line numbers lies a different, inflation-adjusted picture. Once controlled for sterling inflation, the real return the current domestic TV deal in its final season will be more than £300m, or over 17%, down on where it was in its peak season, the start of the three-year cycle that began in 2016-17.

Assuming the current trend of around 3%-a-year inflation continues, even the uplift in international deals does not overcome the prior high-watermark for the League’s total broadcast revenues. The biggest clubs can compensate for that real-terms loss with both the riches on offer from European football and the deal they have struck over merit payments from the international-rights deal that has historically been shared equally among clubs.

In 2017-18 that saw every top-division club receiving exactly £40,771,108 (US$53.3m) from the international-TV share. The equal international-rights share will guarantee at least that much for every club from next season but the new formula will pay more for on-pitch success. With the so-called Big Six – a label that, as explained here, has hitherto been a misnomer – seemingly guaranteed to occupy the top-six positions in one order or another, this has caused consternation among some Premier League clubs who see a growing trend for inequality in future rights deals. The sense of haves versus havenots within the league represents the first challenge Scudamore’s successor will face.

The recent Football Leaks reports have shown us that Europe’s biggest clubs, those most able to leverage their profiles in a digital age where large social-media followings make popularity measurable and transparent, have been threatening the status quo. The Premier League has made a concession to the English contingent but it feels unlikely the Big Six’s appetite for strongarming their fellow domestic clubs has been satisfied for good. Here is the second challenge faced by the next chief executive: a risk that England’s biggest clubs might consider their interests more closely aligned to their rich European cousins than to their Premier League bedfellows. 

Indeed, talk of rival competitions to the Champions League has recently been echoed in the Championship. The Sun reported recently that almost two-thirds of the Championship’s 24 clubs were demanding a greater share of the proceeds of the EFL’s TV deals than the £2.95m each club is projected to receive next season. 

As a former chief executive of the EFL, under its prior guise as the Football League, Scudamore knew his way around the lower leagues. He had worked intimately with many of the EFL’s long-serving executive staff and knew well what motivated and what irritated its clubs. Shaun Harvey, the most among them as chief executive, will leave the EFL in a state of flux too when he follows Scudamore out of the game at the season’s end. Here comes a third challenge for the next man or woman: the risk of fracture in the competition immediately below their own.

Indeed, the very composition of the Premier League competition is also coming under external threat. England’s Football Association is the accredited body in charge of awarding the “Governing Body Endorsements” clubs must receive to sign overseas players from outside the European Union. Under Brexit, should it go ahead, the UK’s obligation to allow free movement of European workers may be lifted. 

The England manager, Gareth Southgate, has frequently complained about the lack of opportunity available to English-qualified players and the FA has been attempting to regulate in favour of itself by reducing the number of overseas players allowed in Premier League squads from 17 to 12. Its chief executive, Martin Glenn – a third senior English football figure soon to leave his role, incidentally – made a presentation to the Premier League’s shareholders’ meeting last November but failed to garner clubs’ support for his proposal.

Should the FA attempt to railroad through its plans regardless, then a damaging civil war between Premier League and the FA could ensue. Glenn’s successor, Mark Bullingham, may think such a fight with the League unwise so early in his tenure as FA chief exec, or he might see it as a chance to score an early victory over a weakened Premier League. Despite the FA’s status as the English game’s governing body, Premier League clubs would have backed Scudamore to win such a battle. For his successor, it would be a fourth major challenge.

Infantino: throne

Then there is FIFA, whose plans for a winter World Cup to be held in Qatar in November 2022 will cause problems for scheduling in at least the 2020-21, 2021-22 and 2022-23 seasons, as each will be displaced to accommodate the event. Its president, Gianni Infantino, has given assurances that even if extended to a 48-team tournament, all World Cup fixtures could be accommodated within the same timeframe as under the 32-team format. Exactly what the details are on these tight scheduling plans no one has yet deigned to reveal.

At the same time, Infantino’s plans for an expanded FIFA Club World Cup would remove some top clubs from the Premier League fixtures calendar for significant parts of the season; meanwhile the putative World Nations League project could remove top players for extended periods too. These factors could have negative impacts for future Premier League broadcast negotiations, as the absences of its most attractive protagonists would also serve to strengthen the offering other competitions would have for their broadcast and commercial partners. Together these matters represent a fifth challenge on the horizon.

Finally there is Brexit. The Premier League’s activities are extremely highly regulated both within the UK and Europe. Its rights auctions come under the scrutiny of both the UK broadcast-industry ombudsman, Ofcom, and the European Competitions Commission. These are frequently fraught negotiations that a greenhorn must now lead: a sixth and potentially most existential challenge. 

Can whoever follows Scudamore possibly be as imperious as he was? Whenever there is regime change, there is frequently an expectation of a power vacuum that leads to competing interests vying for control. Whoever walks into that must make sure they are well versed in the most Machiavellian of political intrigues.

The second challenge, that of the risk of European breakaway, will always be present and may well grow when the digital giants look to expand their offering in football. But the Premier League’s new start under a new chief executive will afford the opportunity to forge new bonds in UEFA, easing the tensions that had often previously characterised the relationship with England’s top division. With the European competition organiser finding its own institutions under threat from FIFA and Infantino, there is at last a coalition of interest between the two organisations that a new broom might be wise to exploit.

If that person can also work with their EFL counterparts to hold things together there, then challenge three will in time resolve itself. The biggest Championship clubs are quite right to complain that they receive too little from their broadcast rights, particularly when EFL-competition games occasionally receive greater TV audiences than some Premier League fixtures. But Sky and BT, committed as they are to spending billions on top-flight rights, have little cash to spare for the second-tier competition. 

There is cause to believe patience will be rewarded here, though, because when we see the tech giants mobilise in earnest for football rights, then Europe’s third-biggest competition by crowd size will likely have the opportunity to generate far greater sums than it currently does, because the product is excellent. 

The FA’s interventionist quotas issue, challenge four, is trickier. The Premier League’s chief executive must be seen to fight his or her member clubs’ corner – and there have already been reports that it will go legal – but cannot instantly command the political influence Scudamore wields. The FA has been invested with all the power by the government on the matter, so if it stands firm it may be that the Premier League will lose this battle. But clever management of any such defeat, pointing out concessions made on the issue, could give the Scudamore’s successor a stronger hand in future issues with the FA.

And that would assist with challenge five – FIFA’s expansionism – which would prove simpler to counter with powerful allies. A close relationship with the FA would give the Premier League a strong proxy voice within FIFA over the expanded winter World Cup, which would surely cause havoc to domestic-season fixtures lists. Moreover, FIFA requires the buy-in of the biggest European clubs for its ambitions around club competitions and it sounds like some have no interest. Noises from such as Arsenal’s managing director, Vinai Venkatesham, will surely encourage the Premier League. 

As for the sixth and greatest challenge – how Brexit affects broadcast regulation – this very concept may in time be an anachronism. The EU’s reach into broadcast matters might well diminish as a decentralised, digital landscape takes greater hold with new technologies under development. 

It is clear whoever jumps into Scudamore’s shoes faces numerous challenges, several of which may appear so intractable the Premier League could be on the point of crisis just as they take the helm. But with every crisis comes opportunity. It is not as if several of the above threats and challenges do not also apply to other European domestic-league competitions, and none of them has the top English division’s riches to avert them.

No. For the Premier League this truly is a crossroads, but it doesn’t have to lead to a car crash.

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2 thoughts on “Is the Premier League past its peak season?

  1. Another interesting article and one that I will have to read several times to understand. I know my view is not popular but I enjoy seeing the best clubs in Europe competing against each other compared to seeing them playing lesser sides. The Europa League is only just getting interesting if you are an Arsenal fan and the Champions League too (even if you don’t support one of the final 8). The top sides in England versus the lesser teams is most often a one sided competition, whats the point? I love the fact that I can now watch Real Madrid and Barcelona on ITV4 of all places …how does that happen?!!! I would welcome a European league even if Arsenal, my team , weren’t in it, because I enjoy watching top sides complete against each other. I can’t see how this will not come about, because there is never going to be a level playing field.

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  2. Interesting and thoughtful analysis. I still think on the subject of a breakaway, the Premier League clubs hold a massive advantage to their European counterparts and there is little reason for the ‘big six’ to try and rock the boat. Compared to Juventus and Bayern, the gains are relatively small. Market forces may dictate a breakaway is imminent but on the financial side that really depends on the TV market potential. There is obvious demand to see big match ups but if you go by the PL’s latest auction and the trouble they had shifting midweek rounds with limited time slots, then UEFA or ECA or whoever is pushing for this to happen will need to be as flexible as possible.

    Now if the breakaway division wanted games at the weekend (most valuable timeslots) where traditionally domestic leagues take place that would really put the cat amongst the pigeons. The PL would obviously be against that but would the ‘big six’ welcome it?

    Liked by 1 person

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