Justice is finally done. The Nationwide folks are the most idiotic business people I've seen. They deserve to lose their court case. Way to go... A business entity (Nationwide) that's only interested in milking its customer (ITV Digital), instead of a win-win business relationship, deserve to go bankrupt!
This isn't good. http://www.soccernet.com/england/news/2002/0801/20020801leagueverdict.html Bradford nearly came within one week of going away (http://www.soccernet.com/england/news/2002/0801/20020801brcfcrescue.html), and I fear they won't be the only one. No wonder why the playoff match for the last Premiership spot is nearly as pressure-filled as it gets. It can easily be about financial survival.
For all the clubs that are near bankruptcy, they only have themselves to blame. I repeat what I said before. This is the recent history of the Nationwide TV rights: Sky: 5 years for 125M pounds (25M per) ITV Digital: 3 years for 315M pounds (105M per) Sky (most recent bail-out deal): 4 years for 95M pounds (23.75M per) As everyone would question, are the rights of the Nationwide worth 105M per? They are when you can find a sucker to give it to you. Notice, you have to consider your client as a "sucker", instead of a business partner that you want to succeed with. That's the typical "take the money and run" approach. That's usually used on poker tables and Internet fraud, but rarely in successful, long-term business relationship. And the league's idiocy filter down to the clubs. This is a bloated contract to begin with. Their product is nowhere near the worth of 105M per year. Yet they commit to player contracts based on this nonsense TV contract?
Is this money they are owed from the past season or money they woudl have received from the upcoming season(s)?
ITV Digital did mess up the figures behind the deal in the first place - to pay that much when their channel isn't yet commonplace in peoples homes was suicidal. Had the games been on ITV itself, I suspect they'd not be complaining too much about the deal. If people really want to watch a game from the League, they can go along and watch it. And from a personal point of view I'd rather spend my money on watching half a dozen games down at the Shay rather than a seasons worth on the TV (not that they'd show that many anyway). As for whether they should be expected to pay up the money involved (Carlton and Granada that is), it depends on how independent ITV Digital is. Not convinced the set up is anything more than their chance to take a risk without the potential consequences. Clubs have messed up, some more than others. My own been one of them (came out of administration on Wednesday), although about the only one not to blame ITV. It was coming. Certainly the contracts need to be sorted out. Would prefer to see a reduction at those at the top, and attitutes changing so the focus isn't all on a few clubs, because that is what fans not the media would want. But at present, with the contracts as high as they are in the Premiership relative to the League they do need to make relegation clauses in the contract (say a cut in wages, possibly with a release clause at a relatively low value to appease the players somewhat). Incidentally rangers, can you recall the bid Sky made when they lost to ITV Digital? I do seem to remember it as being almost as high as they made.
No, I don't remember Sky's bid on Nationwide back in 2000. I only remember Sky and ITV bid an obscene amount of money for the Premiership. As I recall a sad Gary Linekar saying in one of the Euro 2000 broadcasts, "we aren't going to do premiership anymore", or something to that effect, because BBC lost the MOTD rights.
The contract is 315M pounds, 3 years starting at 2001-02. Actually, they have already received 136.5M pounds, i.e. more than 1 season's worth of their product for 1 season's broadcasts. The lawsuit is for the remaining 178.5M pounds. Think of it this way. Even if the league don't receive a penny more, what they have received: 136.5M pounds for one season, is already more than what they received from Sky in the previous contract (5 years total). Even divide 136.5M by 3, at 45.5M per year, it's still 82% more per year than their previous contract. Yet they are still whining. Worse yet, when ITV digital proposed a re-negotiation of 74M, they turned it down. Think of it this way: 136.5M + 74M = 210.5M = 70M/year it still a very big hike from the previous contract, and what they are actually worth, not to mention the renegotiation can take away the exclusive rights from ITV digital. They may even sell a second package to another carrier, like BBC, Sky or EuroSports, for an additional 30-40M pounds. So instead of pocketing 240M-250M pounds for a 3-year deal, they decide to kill the goose and sue. What they end up is 136.5M+(23.75M*2 from Sky) = 184M for these 3 years. I guess admitting "No, we are not that hot a product. Yes, we can re-negotiate the deal such that ITV Digital can survive. We are looking for a long term partnership" is too smart for the Nationwide league.
I'm surprised that the boards aren't hopping all over this. As I see it, one of the stronger leagues in the world (English D1) and prime competitor to MLS for talent (D1 and D2) has just taken a major blow to the gut. On the one hand, this is bad news for sellers, but MLS is primarily a buyer of talent. Am I wrong to assume that the amount of talent you can buy for 1.9 million has just skyrocketed? Is it not far more likely today than yesterday that Berhalter, Lewis, Kirovski and Moore will view the lowly wages of MLS as reasonable under the circumstances? Hasn't the likelhood of a reasonable offer for Mathis, Beasley, Mastroeni, etc... plummeted? To put it bluntly, I think the death of ITV is going to have an obvious worldwide impact... and for leagues drawing from the same talent pool as D1 and D2, this is a godsend.
This is how MLS needs to look at this world-wide downturn in the soccer economy. Instead of being letdown at not getting the high tranfer fees for Mathis, Beasley, etc..., they can look at this as an excellent oppurtunity to pick up top level MLS players much cheaper. This could be extremely important if expansion is happens, as finding enough talent and big name players may be a bit easier. Now if only MLS can fit in a bit of a larger salary cap then maybe they can improve the level of the league a notch higher than it currently is, or expand the rosters a bit to make international club competition realistic for the teams with little to no depth.
Nice analysis. One thing though: there's no guarantee that a renegotiated sum from ITV Digital would ever have been paid. From the figures that have been floating around as to their monthly losses, ITV Digital might well have folded even if the Football League had agreed to that renegotiated figure.
Agreed - however it's extremely bad news for those US players who really want to play in Europe. Quite simply, far fewe are going to make it in the forseeable future.