Wednesday, January 14, 2009
The Premier League is recession-proof. That seems to be the message from the competition's chief executive, Richard Scudamore, who remains bullish about the league's financial health and stability in these uncertain economic times.
Scudamore and his lieutenants have just begun the process of selling the television rights to the Premier League for the next three-year period beginning with the 2010/11 season and, despite the belt-tightening in almost every other walk of life, industry observers expect the league to rake-in up to £3 billion.
For its current three-year deal the Premier League earns £1.7 billion from TV deals in the UK alone, and a further £625 million for games shown around the globe, giving a total value from TV sales in excess of £2.3 billion.
If that figure is surpassed and comes anywhere near £3 billion Scudamore will have pulled off a minor miracle, because it will seem to fly in the face of logic.
The central tenet for the Premier League is that people will always want to watch football, regardless of the economy's health, be it in stadiums, down the pub, in the comfort of your own home, or as highlights either on TV, as clips over the internet or on mobile phones. Quite simply the game has never been more popular, a fact Scudamore knows only too well.
The question for the broadcasters is how to offset the increased cost of acquiring the rights from the Premier League who have placed a premium on their product? Who will foot the bill when broadcasters spend large on TV rights?
Surely it would be commercial suicide in the current climate if satellite and cable companies passed on the cost to their users by demanding increased subscription payments, so who else?
Traditionally it's paid for by advertising revenues, but with companies going under every other day the number of companies ready to spend large on promotional activities is dwindling. That leaves the banks, and very few of them appear to be in a lending mood.
As far as Scudamore is concerned that is someone else's problem and he remains convinced the only problem facing the Premier League is the possibility of a minor reduction in gate receipts as fans look to cap their spending.
He told the Daily Telegraph: ''Of course the credit crunch is an issue because it's an issue for fans. People will be making choices with what they can do with their money. Occupancy was 92% last year, it may go down 1% but we will hold it at 91%.''
If Scudamore et al manage to convince the world's broadcasters to part with record sums at a time of global financial uncertainty the clubs will happily overlook a 1% reduction in ticket sales.
Newcastle United would have started 2009 in the hands of two US-based investors were it not for Bernie Madoff and his alleged pyramid scheme which resulted in an investigation into a staggering $32 billion fraud case.
The unnamed pair, believed to have various property interests in New York, had been in advanced negotiations with Keith Harris, the former Football League chairman who was appointed by Newcastle owner Mike Ashley to utilise his Seymour Pierce investment group to find a buyer for the St James's Park club.
However, just as Harris was expecting a formal offer to be lodged all went quiet. Harris later learned that Newcastle's prospective buyers had been forced to pull out after losing more than $300 million due to the exposure of the Madoff scandal.
"A few weeks ago there was a decent degree of positive thought and optimism that there would be a buyer and then, amongst others, Mr Madoff came along," Harris told the Guardian. "There were two people that were looking at Newcastle with us who lost, let's say, over $300m to Madoff."
With Ashley hoping to sell Newcastle for anything from £200 million to £300 million the loss immediately spelt doom for Harris' two eager investors. Since then Ashley had reassessed his position, shelved plans to sell up club and committed to Newcastle.
The news was welcomed with disdain by some cynical fans who felt that his decision to remain had more to with a determination to ride out the current economic downturn and sell in a more buoyant market than a rediscovered love for the Toon.
You know what they say about cynical people? They are usually right.
Fulham and Portsmouth could soon be counting the cost of failure to fulfil their fixtures against Manchester City and Blackburn Rovers last weekend.
Financial penalties and perhaps even point deductions could follow if the Premier League deem that Portsmouth or Fulham failed to do everything within reason to stage the games which fell victim to the weather last weekend as temperatures across the UK plummeted.
A dim view is taken of clubs who fail to fulfil fixtures: In the 1996/97 season Middlesbrough were fined three points and subsequently dropped out of the division by that margin when they failed to fulfil their fixture against Blackburn as a result of injuries and an outbreak of flu.
With Boro's plight having set a precedent, if either club fails to convince the authorities that they took every precaution to ensure their games went ahead they could find themselves in serious trouble.
Premier League clubs are required to provide adequate pitch protection to ensure games can go ahead, even if the temperatures drops as low as -3C. In other words under-soil heating is not required, but something else is.
Fratton Park is understood to be the only Premier League ground without under-soil heating, but with temperatures failing as low as -9C on the south Coast, at least Pompey had considerably colder weather than at Fulham where the temperature was -1C when the game was called off by referee Rob Styles.