Monopolies Commission
By: Ted Fred Franky, Refuting misinformation, June 6, 2023 1 year ago
Do the ‘big clubs’ have a monopoly?
What is the break down of supporters by club?
If you add up the average home attendances at all the premier league and football laague clubs, you get a figure of around 1,200,000, which suggests this is the total number of football supporters. However they no longer provide the biggest revenue streams for clubs. TV prize money accounts for the bulk of most Premier League clubs revenues and dwarfs match day revenue.
Sky Sports have by far the biggest TV contract, but the BT Sport (now TNT) contract is not insignificant.
The TV audience is centred on the big 6 clubs with most supporters following these clubs as they are shown more often than others. Liverpool and Manchester United have by far the most support in the UK, with Arsenal, then Cheslea, Manchester City and Spurs significantly further behind.
So here is the hypothetical question:
What would happen to BT Sports, if Arsenal, Liverpool and Manchester United were relegated in the same season?
Presumably since Sky’s Football League contract is for over 1000 games as opposed to 240 Premier League games, it woudln’t affect their subscribers. However, anyone supporting these clubs might cancel their BT Sports subscriptions as these clubs would not be shown at all. Would this be sufficient to put BT Sport out of business?
For the sake of argument, if BT Sports lost half of its subscribers as a result could it meet its contractal obligations to the Premier League and pay?
To answer this we would need to know what the break down of subscribers is by club.
Obviously BT Sport keep the information about their subscribers secret, but market research firm BARB collate data and have an idea.
How would renewal contract negotiations be affected for Sky or BT, if these clubs were relegated when the discusssions were taking place?
This situation can arise and can only arise due to FFP, and the effect of these three clubs having too may supporters, is in effect a monopoly, which could damage the sport permanantly.
Could these teams ever get relegated?
There really is no reason why they couldn’t go down, due to the impact of FFP.
The following scenario is one which Manchester United appear to be on the precipice of.
Once your clubs slides a little, revenue falls. So a club could go from top 4 Premier League Revenue and Champions League Revenue to a 5th or 6th place finish and Europa League, this could reduce revenue by £50m-£100m a year. The knock on is players have to be sold, or can’t be bought, weakening the team. So the following season, only a top 10 league finish is managed, without Europe, another £50m drop in revenue, and again players have to be sold or can’t be bought to stay within FFP requirements. Sponsorship deal renewals come up and aren’t valued as much, so revenue falls again. In this scenario. the impact on the clubs ability to buy players is a direct result of FFP and it is quite easy to see how in 4-5 years a club at the top could repeatedly have to weaken its squad to comply with FFP and eventually end up fighting relegation.
So whilst FFP helps ensure teams stay where they are in the football hierarchy and cannot easily move up or down, once a club starts declining it could be forced into an unstoppable slide by the same mechanism.
Is this good for football? Is it good if a big club got relegated?
The reality is FFP makes this possible, and it could easily cause the collapse of the Premier League, especially if it means Sky or BT can only pay half for the next TV deal, that in turn would wreck clubs finances and make them all breach FFP.
The more sinister aspect to this is that if these clubs broke FFP to such an extent that they should punished by relegation from the Premier League, could the Premier League afford to relegate them, with the risk it would have on revenue streams? If this is the case, why do Arsenal, Liverpool or Manchester United need to bother complying with FFP, if they cannot be punished?
Bearing in mind the suggestion made by Martin Samuel that Liverpool and Manchester United have vetos that no other clubs in the Preier League do, ie more power, are they subject to the same rules or manipulating the implementation and enforcement of them?
In other words is the Premier League Corrupt by virtue of how it‘s audience has been developed?
