The ongoing COVID-19 pandemic cost the Premier League over half a billion dollars in missed revenue, according to one estimate. That could have been a full billion, had the league not managed to play out the remainder of its slate of games after the three-month layoff.
Still, over half a billion dollars.
Yet as of Tuesday, 16 of 20 Premier League teams were running a transfer deficit over this summer window. Combined, they have spent $665 million more on new players than they have taken in from sales. Over half a billion more dollars, in other words.
Because in the end, not even a murderous pandemic that has decimated the global economy could slow down the Premier League’s march. The financial juggernaut trudges along, virtually unaffected. Of course, in the 2018-19 season, the most recent one that we have figures for, the EPL grossed $6.7 billion in revenues, a 7 percent uptick from the year before. Mind you, that was the season before its portfolio of new broadcast contracts kicked in.
Then again, a dispute with its Chinese broadcaster caused the Premier League to cancel a $700 million, 3-year contract recently, its richest oversees deal on an annual basis. Yet it also did so because it could afford to, because that amount, while substantial, is still only a fraction of the entire pool.
The only real threat to the Premier League and its global dominance is a collapse in the value of its broadcast rights.
Until such a time, Wolverhampton Wanderers will continue to be able to pay $45 million for an unproven, 18-year-old Portuguese prospect. And newly promoted Leeds United can still opt to poach a Spanish national team striker from Valencia for $38 million. While Everton remains capable of landing former World Cup Golden Boot winner James Rodriguez, having just turned 29, from Real Madrid.
But there is significant flux in the broadcast business as streaming continues to gain ground on the traditional cable model. This is the primary challenge to the Premier League’s cash machine, which has crushed all other circuits underneath its enormous wheels.
The last time the league’s domestic TV rights went up for sale, the market proved softer than expected. Sky Sports paid less on a per-game basis on its 2019-2022 deal than it had on the previous agreement and BT Sport opted for a smaller package. Amazon Prime eventually joined them as a streaming alternative, both saving the day and displaying a sign of the times. The slack in the domestic market was compensated by those foreign deals — mainly a 6-year, $1 billion pact with NBC Sports in the United States.
The value of live sports rights has skyrocketed in a time when DVR, On Demand and streaming have removed the need to watching anything live. That made commercials optional to viewers. Sports, however, are best consumed in real-time, making their advertising valuable with an audience coveted for its youth and diversity.
The rights bubble might pop globally as streaming companies gain further ground without necessarily accruing the spending power traditional broadcasters have. The cable and satellite businesses are contracting, but streaming might not provide the panacea to rescue the Premier League in the absence of significant advertising revenue.
This season, 20 extra EPL games will be broadcast live in the United Kingdom to accommodate fans no longer able to go to stadiums. Traditionally, not every game was aired live; more like half of them, in fact, with only 200 of 380 games shown on TV. That’s unimaginable in American sports, but a fear persists in England that putting too many games on TV will discourage people from coming to the stadium. In fact, a 3 p.m. TV blackout on Saturdays — again, to protect in-person attendance during the most common kickoff slot — instituted in the 1960s survived until the resumption of last season after the pandemic layoff, when the congestion of games made it untenable.
It feels like savvy Premier League teams are already hedging against the possibility that their TV revenue, which underwrites most of the payouts each team gets from the league, will plateau or dwindle. In the move to give the broadcasters more games, the teams reportedly pushed to be allowed to air the leftover games on their own websites or apps — requiring a subscription fee, of course. The broadcasters declined, understanding that their partners would also become their competitors.
A scenario where the Premier League runs into major money problems still feels remote. The league may be the most vulnerable to a crash in TV money, given how much of its revenue flows from the broadcasters, but it’s also the world’s most popular league.
La Liga is already in its post-Cristiano Ronaldo, post-Neymar era, and the only reason Lionel Messi remains is that he is being held there against his will. Serie A lost much of its allure a long time ago. The French league lacks drama. The Bundesliga is often compelling but light on star power that doesn’t play for Bayern Munich. Those leagues will take the brunt first. The Premier League will likely be the last live sports rights property on which broadcasters in most countries decide to cut back.
The Premier League continues to rule the TV rights game. But the windfall may not last forever.
Leander Schaerlaeckens is a Yahoo Sports soccer columnist and a sports communication lecturer at Marist College. Follow him on Twitter @LeanderAlphabet.
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