More live Premier League games equals increased club revenue

According to new research (2004-08) more Premier League football games should be broadcast live as it would boost club funds.
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According to new research (2004-08) more Premier League football games should be broadcast live as it would boost club funds.

Adam Cox, of the University of Portsmouth's Business School, has found that although clubs would lose numbers at the turnstiles if all their games were televised, they would earn more money from the screening rights.

Mr Cox said: "The arguments put forward by the Premier League for the way it currently collectively sells limited rights are to protect the financial interests of the member clubs.

"However, the evidence suggests all three parties - fans, broadcasters and clubs - would be better off if the number of Premiership matches shown on television was increased.

"The Premier League is acting as a cartel to protect clubs' gate revenue by artificially limiting the number of rights to screen games but this behaviour is limiting profit for them and the clubs.

"New data shows broadcasting live football matches does have an effect on the number of people through the gate to watch matches, but this effect is outweighed by the earnings clubs make from selling the television rights."

The Premier League controls the sales on behalf of all its 20 clubs and it limits the number of games sold to broadcasters to 138 out of a possible 380 matches per season. The deal is worth £594million a year.

Mr Cox said: "We estimate that, when taking into account all 20 clubs, gate revenue is reduced by an average of 19.7% (£232,237) when the match is broadcast live.

"But payments for screening games in the 2007/08 season were, on average, £4.12 million per game, which is split between the clubs and includes a merit payment for final league position, and a facility fee for hosting a match."

He said the "top four" clubs (Arsenal, Chelsea, Liverpool and Manchester United) would see gate takings drop by an average £50,060 (2.4%) when a match is broadcast live.

The "bottom five" clubs (Birmingham, Middlesbrough, West Bromwich Albion, Wigan and Sunderland) would see gate takings drop by an average £169,839 (21.47%).

But he claims that both top and bottom clubs would gain an average of £4.12 million per game.

Mr Cox said: "The bottom line is the loss of gate revenue for broadcasting a live match is heavily outweighed by the financial benefit of selling the broadcast rights.

"If the Premier League was more confident about the size of the loss being small, then perhaps they would sell more games for broadcast.

"This would benefit the clubs with more money to buy greater playing talent, which will then attract more audiences, and would also benefit customers as they have a greater choice of where they can watch a football match.

"The risk is that the Premier League is acting as a cartel, restricting output and depriving consumers of watching football matches in the way they choose.

"This is contrary to Government competition guidelines on monopolies but these restrictive practices have been allowed to continue because they've argued that restricting the number of live broadcasts limits the effect of lower attendance at the stadium, although it is not clear that the Premier League know the size of this."

 
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