Box Office Premier League Debut

No, not another foreign player but a new television deal to support the economically challenged Premier League clubs.

There’s no easy way to say this but… Premier League clubs are struggling financially. I know, I know… you think that some institutions are just going to be safe forever, untouchable – but it’s over… we have Football In Need.

It started with lockdown last season, when there was a desperate need to finish the Premier League season otherwise the League would be liable to their television contracts – failing to meet their end of the bargain – and owing hundreds of millions of pounds back to Sky, BT and Amazon. Without Premier League football returning to our screens last season, the Premier League was looking at a minimum £330m loss of revenue. Even with returning to television, the multiple broadcasters received approx. £170m.

At this time there was a general feeling that broadcasters such as Sky were being greedy in making such demands, but in turn they were passing on savings to the average household for not being able to fulfil their contractual agreements of providing Live Premier League football. BT offered a refund, and the opportunity to donate that refund to the NHS. It was a different time where these big companies were trying to support the general public.

It’s those sentiments exactly that drove the government to request ALL Premier League football matches to be televised, including some free-to-air on the BBC, to help maintain the mental health of a footballing mad nation. This was a gift – from the Premier League, from TV broadcasters, and the government. But it’s an unsustainable gift, one which breached the Saturday 3pm live football agreement, and one only ever deemed to be temporary whilst the nation was in a lockdown, devoid of all football below the second tier. That period has most definitely come to an end, and a new agreement needed to be made.

Monopolies Commission and Football Packages
To fully understand the narrative around Pay Per View football, we need to understand the whole process around the availability of live televised football, and this starts in 1992. Sky had a vision, to manufacture live football into a product – a product that would become huge business – because it was the most popular product in the country – we just didn’t realise it yet.

As live televised football developed, it had become apparent that Sky had created a monopoly of live football. If you wanted to watch it, you needed to subscribe to Sky. The Monopolies Commission – as they do across all business activity – investigated the business practice and declared that Premier League football available for TV needed to be broken into football packages, that no one broadcaster could own all packages. It’s a key note in history that all fans should be aware of – it’s not corporate money hungry broadcasters that mean needing to pay four different providers for every available Premier League match – these rules are in place for OUR BENEFIT. If you do not understand the negative impacts of a monopoly, you haven’t played the board game with your family at Christmas. If Sky continued to own all Premier League football, they would have no requirements to develop their product further and no accountability for the quality or cost of their product. Only by enforcing more broadcasters into live televised football could this monopoly be broken. This welcomed ITV Digital, BT Sport, Amazon Prime, etc etc.

So my first point of call on those fans who moan about having to spend money with three different broadcasters to watch all Premier League matches… this – is – for – your – benefit.

Currently, Sky Sports have 4 television packages, allowing them approximately 4 live games a week. BT have one package, for approximately 1 game a week. Amazon picked up the remaining two packages, showing all 10 midweek matches during two key weeks within the season. The concept of splitting these games is to allow fans to access live Premier League football without having to spend additional money, or to watch certain matches at one friend’s house, and to host other games yourself. It’s to protect the finances of all, not to concern themselves with those demanding access to all.

Release from Lockdown
The agreement to show all remaining 2019/20 matches post lockdown live was a free benefit to broadcasters. Sky, for example, had paid £9.3m per game in their football packages – suddenly they had free access to even more – reducing their average price. They alongside BT, Amazon and BBC were the winners from showing the remaining unselected games live on their format. Sky and BT now had more products to sell advertising to, Amazon continued having products to drive subscription growth – BBC had their first ever live Premier League football, a statement achievement.

The losers of this situation, undoubtedly, was every football club in the country. In the top flight, the revenue generated from each home match is a hugely significant figure. For argument’s sake, consider it just being ticket revenue: In 2018/19 Man Utd’s highest ticket price was £53 and lowest £31. To keep things simple, let’s take an approx. of £40 per ticket and multiply by their 76,000 capacity and you’re looking at revenue per match of £3 million. That doesn’t include the meals, drinks and merchandise purchased on top. For each match played, Premier League clubs were out of pocket for this revenue.

Fortunately for top flight sides, perhaps even Championship sides – their match day revenue is not a hugely determining factor to their survival. At this level, television money is their main benefactor. For lower league sides, match day is a predominant factor in their overall turnover and it’s the defining reason for them needing a bail out this season – lower league clubs run at a loss putting matches on without fans.

To appease this, we ended football from League One and below, which means these fans needed entertaining too – and it’s a reminder as to the fundamental reasons of placing these games as ‘free to air’ for the state of the nation’s mental health.

But… heading into the new season, this model was not sustainable. The government held firm to plans to re-introduce fans from October 1st, which meant lower league football was scheduled to begin from then too. With Premier League football due to begin in September, a short term agreement was again made for all 10 Premier League fixtures to be shown free-to-air. Clubs continued to run games without fans, without match day revenue, and the broadcasters continued to get something for nothing. When the second wave of Covid was making the return of fans untenable – a new agreement was needed, a more effective long term solution – to appease the losses of math day revenues. Step forward Pay-Per-View football.

Pay-Per-View Objectives
There are four factors to address under the new agreement that is in place for Pay-Per-View football.

Why?
We’ve addressed the why above, but it’s as simple as this. The current free-to-air model for Premier League matches was unfairly benefitting broadcasters and not addressing the loss of revenue for individual clubs. These games needed to be aired to their own fans, those that could not make it to home matches – but why should they be available to everyone for free when we already have an effective auction for television rights based on packages.

How Much?
As explained, only the additional games outside of the football packages will be placed on Box Office, and these will be available for £15 per match. That sounds very expensive compared to £30 per month for all available games, but this is not the comparison that is being made. We’re reflecting on the general cost of attending a Premier League match, looking at how much the average MATCH GOING fan budgets for – and on that note this is actually a very generous offer. For myself and my partner to attend a Premier League match we will have budgeted £100 just for tickets, then travel, then eating and drinking.

What do you get?
This is an unfair comparison no matter how you look at it. Yes, you would spend far more money attending the match, but you get far more out of the atmosphere and experience. I can’t and won’t argue with that – attending matches live – particularly as part of fan group – is incomparable. It’s the greatest feeling and we need it back. However, this is the best available option – we don’t even have the pubs to enjoy this. Understandably, a knocked-down price from a match day ticket should, and has, been considered. Further to this… there’s a rumour there will be no commentary. This is a weird element to the narrative, but… it’s probably because…

Where does the money go?
The broadcasters will not see a penny of the revenue gained from Pay-Per-View matches. This money is directly to support the loss of earnings from match day revenues and therefore the money generated will go directly to the Premier League clubs. Sure, Sky and BT will benefit from advertising and sponsorship but not in the same ways. This money is for the Premier League. There are remaining questions as to how that money is distributed. We expect teams like Manchester United to generate more Pay-Per-View subscribers than Burnley, so when Utd are at home do both teams get the money, and vice versa? No-one is saying this ideal – it’s 2020, the world is on fire – no-one is working on ideals right now. This is considered the best of a bad situation.

The Fan Reaction
Most negativity I have witnessed around this has been from armchair fans, the cliche “I already spend [x] on Sky, BT, Amazon” or all of the above. This is a common problem with our modern day society of wanting something for nothing. We pay that much money because we deem it important enough. We had no such concerns about the remaining matches outside of television packages before, but now that it’s been made available we feel we are owed it. That’s bullshit. Football is expensive to follow it all, but it’s the choice you make. There’s plenty of free football to watch every weekend, there’s cheaper local football to watch every weekend, and you could just choose to only purchase one package. No-one is making you do anything, you just want to blame someone else.

The Pundit Reaction

Gary Neville amongst others have been disappointed in the move to put some games behind a pay wall, but without specific references to what or why this is a problem “This is a really bad move by the Premier League to charge £14.95 for single matches that have been shown free for 6 months!” The angle appears to be that we’re having something taken away when it’s been available previously. I do understand that, but there’s a bigger picture at large. The country is struggling financially, and live sport has had a positive impact on the country’s mental welfare but it’s not an abandonment of live sport. The country is progressing and we need certain actions to help return to a form of normality.

The Precedent
It’s a dangerous precedent to introduce Pay-Per-View football that generates revenues for specific clubs. It’s a move that Barcelona and Real Madrid have been trying to manufacture for themselves in Spain. They’re the real attraction to La Liga, why should they share their television revenues? We’ve seen this action take place in the Premier League with the Big 6 – currently domestic television rights are split by the final position in the league table – but the Big 6 are requesting a larger stake of international television rights to be made to just the top placed teams. By introducing a model that financially rewards the big teams regularly, we create a cycle of the rich getting richer and the poor going bankrupt. It’s dangerous to open that door to a group of businessmen that are already making a power grab for dominance.

The Season-Ticket Reaction
These are the fans that this move is theoretically being designed for. At Maidstone United, a National League South side, they’re live streaming their home matches to season ticket holders at a match day ticket cost. This is the model ideally clubs would like to implement.

By providing access to their own season ticket holders or members, they can control the cost, control the product, and control the advertising. They can also produce everything on brand to further engage with their community. When Man Utd’s Executive Vice Chairman Ed Woodward stated they were against the proposals for Pay-Per-View matches, it must be remembered they’re the least likely to benefit financially from this – definitely when compared with the method directly through the club. Man Utd have the biggest stadium, the largest fan base, and are more often selected as one of the live games anyway – their opportunity to profit from this is not as high as selling tv licensing directly. Notably whilst he made those comments, it was only Leicester that voted against the proposals.

The Illegal Streaming
This is a widespread problem across the live televised match industry already, but understandably there’s a concern that Pay-Per-View matches will push people to that market as they’re unwilling to pay the correct fee for the legal version.

Unsure of how large this issue is? Ever wondered why there’s a silhouette of a pint glass in the corner of the screen when watching football down the pub? It’s the same reason you will occasionally see a string of digits on your home live televised matches. These are designed to catch the individuals / businesses involved in illegal streaming. Where a licensed venue shows football without that pint glass, they’re operating a private not public license. When an illegal stream is identified, they can track the string of numbers back to the account that is providing it. These are the basic domestic methods – then there’s illegal streaming from the middle east coverage of the Premier League.

The thing is… it’s a cop out. It’s a lazy argument to say that Pay-Per-View matches is the reason people are pushed into crime. That’s what it is. Do you believe it’s a victimless crime? Perhaps you do, but it’s a crime nonetheless. It’s an unrelated major concern to the television industry (as it effects products such as Game of Thrones and Marvel movies too) but it’s another action that shows people expect something for nothing.

If you cannot afford a luxury item, it is not your right to obtain it illegally. Football is a luxury item. It is not a human right, nor it a human necessity and yet the reaction is often that we are owed this.

Conclusion
This move, like most business decisions across the globe right now, is a middle ground. It’s designed with all stakeholders in mind, but it’s not going to please everyone. It allows us to retain a level of control over the live televised industry, to retain some finances within the clubs, all without giving too much leeway to any one party. Unfortunately, that does leave fans feeling like they’re the victims – another £15 per match?! Yes. If you do want to watch every Premier League match ever – it’s going to cost you – that’s how the economy works.

And when all else fails, Match of the Day is still free-to-air and they have a snazzy Sunday program too. We’re not that privileged we get to complain about this.

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