Great read from the Athletic The Premier League has secured a crucial agreement with leading broadcaster Sky Sports that means Premier League clubs will defer the payment of a collective rebate worth in excess of £170 million until the 2021-22 season. Sky has broadcast the Premier League since its foundation in 1992 but the broadcaster has been badly affected by the coronavirus pandemic that has called a halt to all live sport on its platforms. As a result, Sky, BT Sport and the Premier League’s many international partners are claiming a collective £330 million rebate from Premier League clubs. At the last meeting of Premier League clubs, the top-flight sides were informed they will lose a minimum of £330 million to broadcasters, even upon the completion of the season. This is the bare minimum and it is on the proviso that the Premier League season restarts on June 12 and concludes by July 26. The Athletic can reveal that £223 million will be repaid to domestic broadcasters while £107 million will be handed out to international broadcast partners. Should the season fail to play out, which remains a possibility in the event of a second spike of coronavirus, then a total £762.2 million (£442.5 million to domestic partners and £319.7 million to international broadcasters) would have to be repaid. This is the doomsday scenario for Premier League clubs. However, The Athletic can reveal that the Premier League has negotiated a settlement that will see Sky pay its entire scheduled fees on time for the remainder of the current campaign and for the 2020-21 season, which will protect imminent cash flows for top-flight clubs. Premier League clubs are already down on match-day income and sponsorship but Sky’s deferral allows breathing space. The Sky rebate will then be claimed during the 2021-22 season. The hope is that the economic tremors of the pandemic will have calmed by August 2021 and clubs will be in a better position to make the repayments. It also affords clubs greater flexibility in the transfer market this summer, potentially gaining an advantage over rivals in other major European leagues. The Sky settlement still requires the final sign-off from clubs but it was presented to Premier League shareholders at the last meeting of May. This deal would also protect solidarity payments to the EFL, academy funding and community investment. Executives are still to finalise an agreement with other UK partners such as BT Sport but they expect those agreements “will follow a similar profile”, according to the settlement document, which would take the figure to £223 million. By contrast, the document seen by The Athletic reveals that the £107 million owed to international broadcasters must be repaid in full by the end of July 2020. There is, however, a spectacular catch in the Sky agreement. If this season is curtailed, Sky is not prepared to defer their rebate and the entire £762 million will be claimed by all broadcasters. The Premier League proposal also warns that solidarity payments to the EFL would fall by 25 per cent in January 2021 if the current season is curtailed. It is little wonder, therefore, that clubs are hastening their attempts to finish this season. How the £330 million rebate will be repaid has caused distress among clubs at the top of the division. Premier League broadcasting income is not distributed equally. For the UK income, 50 per cent of the total revenue is shared equally between the 20 clubs. However, “facility fees” (based on the number of times a team is shown on television) and “merit payments” (based on the final league position) make up the other half (25 per cent each). The most successful clubs in the Premier League will be expected to contribute most handsomely to the rebate as part of the income is dictated by where a team finishes in the table. As it stands, Liverpool would pay back £21.5 million but rock-bottom Norwich would return £6.8 million. The Premier League estimates that the average repayment will be £14.1 million each. Crucially, the league is hoping to negotiate a repayment plan that protects cash flow and enables money to be returned over two seasons, rather than instantly. Elsewhere, broadcasters are considering how they can employ their renewed leverage. As matches play out behind closed doors, all remaining 92 Premier League games will be shown on television. This will see 64 games on Sky Sports (including 25 free-to-air) and 20 matches behind the BT Sport subscription. BBC and Amazon Prime will broadcast the remaining eight matches (four each) free of charge. Aston Villa v Sheffield United and Manchester City v Arsenal will restart the season on Wednesday, June 17, and The Athletic understands that Tottenham v Manchester United will be next. Sky plan to broadcast the match live on the following Friday evening. As broadcasters search for novel ways to refresh their coverage, television executives have turned their minds to the finer details of section K of the Premier League handbook. This is the part of the handbook reserved for broadcasting requirements. Buried deep within point 114 of Section K, it may come as a surprise to learn that television companies can request half-time interviews with Premier League managers or their backroom staff. Could we see Jose Mourinho stop by for a chat on his way to the dressing room to dissect his side’s first-half failings or a contentious refereeing decision? Broadcasters have not exercised this option before in the Premier League. The handbook reads: “The UK Broadcaster may request that the manager (or a senior member of the coaching staff) of either or each participating club provides an interview at the end of the half-time interval, before the re-start of the league match. The manager may elect to provide the interview requested or decline to do so, at his absolute discretion.” The final sentence, underlining the manager’s choice, most probably explains why the half-time interview is yet to become a Premier League phenomenon. This, however, may be about to change. Owing to the grave financial repercussions of a global pandemic, Premier League clubs are more indebted than ever before to their broadcast partners. It is one of several innovative ideas that may be on the agenda at Thursday’s meeting between top-flight club representatives and the broadcasting companies. With more television coverage than ever before, more pioneering ideas may also be pushed. Some of the concepts likely to be approved include initiatives such as asking players to take pre-match morning selfies that can feed into coverage or video diaries of their journeys to the game. The bolder and more controversial suggestions include microphones placed closer to the dugouts to enable viewers to hear instructions provided by managers to their substitutes before they run onto the field of play. One executive with experience on advising on broadcasting deals in sport and media explained the landscape to The Athletic: “In the medium term, broadcasters need to reevaluate the economics of their sport rights deals. Even if you believe the Office for Budgetary Responsibility’s predictions for a relatively quick recovery in GDP, we are in a very long haul on unemployment, consumer spending and corporate profitability. “If you are an advertising-funded broadcaster, the next two or three years are going to be challenging. If you are a pay-TV broadcaster, peoples’ willingness or ability to pay will be challenged. We could have a considerable number of unemployed people next year. The money the broadcasters have to play with, whether that be via subscription or advertising, is going to be under pressure. Advertisers are not advertising. There are whole sections of the economy just not advertising right now: travel, cars… even those who are advertising, such as Tesco or Halifax, are getting a good price. Advertising follows supply and demand. There is currently low demand and huge supply.” Sky, therefore, is perceived to have shown generosity in not only deferring payments but also agreeing to air 25 free-to-air fixtures, including Everton’s home match against Liverpool, as well as permitting matches to run on the BBC, which had not paid to show live matches. It is worth cautioning, however, that the state broadcaster will be afforded the ninth or tenth pick of matches in the four gameweeks it participates in. The BBC’s one confirmed fixture so far is Bournemouth’s home match against Crystal Palace and, barring another gesture of goodwill from Sky, we should not expect headline fixtures on the BBC. Does Sky’s approach leave clubs open to granting more access? Not in all quarters. Several Premier League clubs do not entirely sympathise with the broadcasters’ argument for a rebate. One source argued to The Athletic that in a socially-distanced society, where supporters are unable to attend matches, many people will be captive within their own home and therefore more likely to sign up to pay-TV to watch live sport. The £330 million rebate has not, therefore, been viewed as a generous sacrifice by all involved. On Wednesday, media officials from the 20 Premier League clubs met to discuss a unified approach over a video conference, then on Thursday, representatives from Arsenal, West Ham, Southampton and Manchester City will meet, on behalf of the division, with Premier League and broadcasting executives to discuss proposals. What kind of innovations might we see? One executive says: “Half-time interviews are one thing. To go to players or staff during the match is even more engaging. BT Sport does this in rugby and it has also been done in Twenty20 cricket. At half-time, people cannot wait to go down the tunnel. If they are mic’d up, they could do it in a socially-distanced way. There might be a greater willingness to engage. Clubs will be looking at finances and thinking they need to do everything they can to keep broadcasters onside. It stands more chance of passing now than it has for a while. It could refresh the product a little. “I am not sure there is an untapped scene in football. The 3pm blackout window on Saturdays will begin to be undermined. If clubs cannot get season ticket holders back into stadiums at reduced capacity, they will try for more slots during the week. “Friday and Sunday night might be more regular. It had been objectionable because it was hard for away fans to travel. That argument is going to fall away. Who knows how this would work with players? But could you do an early game in an Asia-friendly slot? Do not rule anything out.”
