Premier League Scores Big in Rights Fees

The owners of the 20 clubs playing next season in the English Premier League ought to send a thank you note to the European Commission. Last summer, the European Commission demanded that no more than 50% of its televised games go to one broadcaster. In its then expiring contracts, BSkyB, the British satellite arm of Rupert Murdoch's News Corp., had a contract to televise all of the PL's televised games. After a lengthy fight, the Premier League agreed to a rule that no one broadcaster would televise more than 115 out of 138 games or a little over 80%. In the absence of the new rule, BSkyB would have been granted the entire contract again.

So, the contracts get awarded to BSkyB and Setanta, with Setanta getting 46 games, for a total of approximately $1.05 billion a season, a 70% increase over the previous contract. What makes this all the more impressive is that the owners have not tailored their game for television in any way. Unlike their counterparts in the NFL, the Premier League owners have not changed the rules to make the league more competitive nor have they altered the game for the insertion of more commercials. In fact, there are no stoppages of play except for halftime. Commercials run along the bottom of the screen or in the corners as play continues.

The Premier League is one of the least competitive leagues this side of the Israeli national basketball league (which has been won something like 28 out of 29 years by Maccabi Tel Aviv). For instance, Manchester United won 8 out of the first 11 years and Chelski has won the last 2 and is spending money like oil prices are still $75 per barrel, having just signed Michael Ballack to a new contract for about $200,000 per week. Proof positive that you can still make a fortune without tailoring your product to television's exact specifications.

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