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http://www.guardian.co.uk/football/2011/oct/11/liverpool-breakaway-tv-deal
The deal that shares television's billions equally between Premier League clubs is facing its biggest threat to date after Liverpool announced they would lead a challenge for overseas TV rights to be sold on a club-by-club basis.
Liverpool's managing director, Ian Ayre, has insisted the break-up of the established broadcasting deal, worth £3.2bn in total to all Premier League clubs for 2010‑13, is "a debate that has to happen", with the Anfield club in favour of the Spanish model that allows Barcelona and Real Madrid to negotiate individual contracts that dwarf their domestic and European rivals.
Since the Premier League's foundation in 1992 its success has been largely based on the principle of collective selling, where each club no matter how lowly can expect a fixed share of TV deals with "merit" awards for finishing positions as an add‑on. Changing this model would risk revolt from the smaller clubs who stand to lose most, and thus threatens the league's very structure.
At present, the Premier League sells domestic and overseas broadcasting rights collectively and more than doubled international revenue in its last negotiations, from £625m for 2007‑10 to £1.4bn for 2010‑13. With the Premier League shown in 212 countries and having 98 broadcast partners around the world, it is expected the next deal will show a similar increase, with overseas rights potentially worth more than domestic for the first time.
Ayre believes the Premier League's four biggest global draws – Liverpool, Manchester United, Chelsea and Arsenal – deserve an increased share from 2013, with overseas broadcasting having a greater influence on the Anfield club's financial future than a new stadium. "Personally I think the game-changer is going out and recognising our brand globally," said the Liverpool managing director. "Maybe the path will be individual TV rights like they do in Spain. There are so many things moving in that particular area.
"What is absolutely certain is that, with the greatest of respect to our colleagues in the Premier League, but if you're a Bolton fan in Bolton, then you subscribe to Sky because you want to watch Bolton. Everyone gets that. Likewise, if you're a Liverpool fan from Liverpool, you subscribe. But if you're in Kuala Lumpur there isn't anyone subscribing to Astro, or ESPN to watch Bolton, or if they are it's a very small number. Whereas the large majority are subscribing because they want to watch Liverpool, Manchester United, Chelsea or Arsenal.
"So is it right that the international rights are shared equally between all the clubs? Some people will say: 'Well you've got to all be in it to make it happen.' But isn't it really about where the revenue is coming from, which is the broadcaster, and isn't it really about who people want to watch on that channel? We know it is us. And others. At some point we definitely feel there has to be some rebalance on that, because what we are actually doing is disadvantaging ourselves against other big European clubs."
It would require 14 of the Premier League's 20 members to vote in favour of a new commercial arrangement. Though Sir Alex Ferguson recently described the collective deal as "fair", albeit while insisting clubs deserved more from overseas rights, and La Liga's system has attracted widespread criticism, Ayre believes the status quo jeopardises the financial might of the Premier League.
"If Real Madrid or Barcelona or other big European clubs have the opportunity to truly realise their international media value potential, where does that leave Liverpool and Manchester United? We'll just share ours because we'll all be nice to each other? The whole phenomenon of the Premier League could be threatened. If they just get bigger and bigger and they generate more and more, then all the players will start drifting that way and will the Premier League bubble burst because we are sticking to this equal-sharing model? It's a real debate that has to happen."
Liverpool insist their radical proposals are limited to overseas broadcasting, although success on that front could set a precedent domestically in the long term, and the club plans to raise the issue at the next Premier League meeting. Ayre's frank admission comes almost one year on from Fenway Sports Group acquiring the club from Tom Hicks and George Gillett in the high court and, along with broadcasting revenue, another major financial decision to be resolved by the American owners remains whether to construct a new stadium or redevelop their current home, Anfield.
Liverpool's managing director insists the club are pursuing "a parallel course" on both options, with planning regulations complicating the redevelopment of Anfield and the financial benefits of a new-build uncertain, although Ayre admits the latter option is only viable with a naming rights deal. "We have been in discussions here and in other parts of the world with a small group of people that we have narrowed down that we are targeting for naming rights. That is an absolute catalyst to building a new stadium. The economics just don't stack up without it.
"When will the decision be made? It'll only be when we reach an answer with both. It's hard to put a time on it. If you put a deadline on the naming rights, then you start to marginalise the deal. We aren't desperate. We think we have an amazing proposition as one of the biggest clubs in the world. I don't recall any football club of this size with this international reach that's ever done a naming rights deal. It is quite unique in that sense. Barcelona, Real Madrid and Manchester United haven't. Nobody in football has done this at this level. It's new ground and it will take what it takes."
Ayre, along with the former Liverpool chairman Martin Broughton, ex-chief executive Christian Purslow and Fenway Sports Group, remains the subject of a £1bn lawsuit filed by Hicks and Gillett over the events surrounding their departure last October. "It's an unwanted and unwelcome distraction. That's their prerogative but we remain extremely confident that we did the right thing," he said. The Liverpool MD offered his resignation to John W Henry following FSG's victory in the high court, and admits the five-times European champions could have entered administration had Hicks and Gillett retained control.
"Certainly the bank had the power to call in the debt and at the time there wasn't anyone ready to take on that debt. So I guess the answer to that [would Liverpool have gone into administration] is yes. It's hypothetical but based on where we were and based on the circumstances at the time that was a very real threat. That was the case in the final hours. That was one of the other routes we could have gone down."
The deal that shares television's billions equally between Premier League clubs is facing its biggest threat to date after Liverpool announced they would lead a challenge for overseas TV rights to be sold on a club-by-club basis.
Liverpool's managing director, Ian Ayre, has insisted the break-up of the established broadcasting deal, worth £3.2bn in total to all Premier League clubs for 2010‑13, is "a debate that has to happen", with the Anfield club in favour of the Spanish model that allows Barcelona and Real Madrid to negotiate individual contracts that dwarf their domestic and European rivals.
Since the Premier League's foundation in 1992 its success has been largely based on the principle of collective selling, where each club no matter how lowly can expect a fixed share of TV deals with "merit" awards for finishing positions as an add‑on. Changing this model would risk revolt from the smaller clubs who stand to lose most, and thus threatens the league's very structure.
At present, the Premier League sells domestic and overseas broadcasting rights collectively and more than doubled international revenue in its last negotiations, from £625m for 2007‑10 to £1.4bn for 2010‑13. With the Premier League shown in 212 countries and having 98 broadcast partners around the world, it is expected the next deal will show a similar increase, with overseas rights potentially worth more than domestic for the first time.
Ayre believes the Premier League's four biggest global draws – Liverpool, Manchester United, Chelsea and Arsenal – deserve an increased share from 2013, with overseas broadcasting having a greater influence on the Anfield club's financial future than a new stadium. "Personally I think the game-changer is going out and recognising our brand globally," said the Liverpool managing director. "Maybe the path will be individual TV rights like they do in Spain. There are so many things moving in that particular area.
"What is absolutely certain is that, with the greatest of respect to our colleagues in the Premier League, but if you're a Bolton fan in Bolton, then you subscribe to Sky because you want to watch Bolton. Everyone gets that. Likewise, if you're a Liverpool fan from Liverpool, you subscribe. But if you're in Kuala Lumpur there isn't anyone subscribing to Astro, or ESPN to watch Bolton, or if they are it's a very small number. Whereas the large majority are subscribing because they want to watch Liverpool, Manchester United, Chelsea or Arsenal.
"So is it right that the international rights are shared equally between all the clubs? Some people will say: 'Well you've got to all be in it to make it happen.' But isn't it really about where the revenue is coming from, which is the broadcaster, and isn't it really about who people want to watch on that channel? We know it is us. And others. At some point we definitely feel there has to be some rebalance on that, because what we are actually doing is disadvantaging ourselves against other big European clubs."
It would require 14 of the Premier League's 20 members to vote in favour of a new commercial arrangement. Though Sir Alex Ferguson recently described the collective deal as "fair", albeit while insisting clubs deserved more from overseas rights, and La Liga's system has attracted widespread criticism, Ayre believes the status quo jeopardises the financial might of the Premier League.
"If Real Madrid or Barcelona or other big European clubs have the opportunity to truly realise their international media value potential, where does that leave Liverpool and Manchester United? We'll just share ours because we'll all be nice to each other? The whole phenomenon of the Premier League could be threatened. If they just get bigger and bigger and they generate more and more, then all the players will start drifting that way and will the Premier League bubble burst because we are sticking to this equal-sharing model? It's a real debate that has to happen."
Liverpool insist their radical proposals are limited to overseas broadcasting, although success on that front could set a precedent domestically in the long term, and the club plans to raise the issue at the next Premier League meeting. Ayre's frank admission comes almost one year on from Fenway Sports Group acquiring the club from Tom Hicks and George Gillett in the high court and, along with broadcasting revenue, another major financial decision to be resolved by the American owners remains whether to construct a new stadium or redevelop their current home, Anfield.
Liverpool's managing director insists the club are pursuing "a parallel course" on both options, with planning regulations complicating the redevelopment of Anfield and the financial benefits of a new-build uncertain, although Ayre admits the latter option is only viable with a naming rights deal. "We have been in discussions here and in other parts of the world with a small group of people that we have narrowed down that we are targeting for naming rights. That is an absolute catalyst to building a new stadium. The economics just don't stack up without it.
"When will the decision be made? It'll only be when we reach an answer with both. It's hard to put a time on it. If you put a deadline on the naming rights, then you start to marginalise the deal. We aren't desperate. We think we have an amazing proposition as one of the biggest clubs in the world. I don't recall any football club of this size with this international reach that's ever done a naming rights deal. It is quite unique in that sense. Barcelona, Real Madrid and Manchester United haven't. Nobody in football has done this at this level. It's new ground and it will take what it takes."
Ayre, along with the former Liverpool chairman Martin Broughton, ex-chief executive Christian Purslow and Fenway Sports Group, remains the subject of a £1bn lawsuit filed by Hicks and Gillett over the events surrounding their departure last October. "It's an unwanted and unwelcome distraction. That's their prerogative but we remain extremely confident that we did the right thing," he said. The Liverpool MD offered his resignation to John W Henry following FSG's victory in the high court, and admits the five-times European champions could have entered administration had Hicks and Gillett retained control.
"Certainly the bank had the power to call in the debt and at the time there wasn't anyone ready to take on that debt. So I guess the answer to that [would Liverpool have gone into administration] is yes. It's hypothetical but based on where we were and based on the circumstances at the time that was a very real threat. That was the case in the final hours. That was one of the other routes we could have gone down."
