A formal approval by the UK Government is the final hurdle the new media rights deal of the Premier League with its current broadcast partners needs to overcome to become reality.
Renewal Alleviates Value Concerns
The Premier League and Sky Sports, BT Sport, Amazon Prime Video, and BBC Sport agreed to renew their £4.5 billion TV rights deal throughout the 2024/25 season, but the deal needs Government official rectification even though UK officials agreed in principle with it.
The renewed deal which will kick in from 2022/23 season and will run for 3 years is, in essence, a huge boost for the Premier League after it managed to keep the same value for the rights of its sports product in times during which broadcasting rights values decline globally.
“The Premier League would like to express our gratitude to our broadcast partners for their continued commitment to the Premier League and support for the football pyramid.”Richard Masters, CEO, Premier League
The Premier League, which usually utilizes a tender process for its media rights, decided to go for a private sale this time, worried that due to the coronavirus developments any auction may result in a significant dip on the value its current TV deal has as analysts projected the 2022/25 seasons may bring in between £500 million and £900 million less.
“We are hugely appreciative of the Government agreeing in principle to allow this arrangement and for their continued support for the Premier League and the English game. Covid-19 has had a significant impact on football, and renewals with our UK broadcast partners will reduce uncertainty, generate stability and promote confidence within the football pyramid.”Richard Masters, CEO, Premier League
Top Clubs Agreed to Concessions
The Government’s approval for an exclusion order under the Competition Act 1998 to allow the Premier League to circumnavigate normal competition rules did not come free of charge for the top-flight English football clubs, especially after officials have the upper hand for interventions due to the European Super League fiasco.
The English football elite agreed to allocate an additional £100 million on top of the £420 million they were already set to pay to the English Football League, while total contribution to the rest of the football pyramid is set to be in excess of £1.5 billion over the next 3-year deal duration.
“Sky Sports, BT Sport, Amazon Prime Video and BBC Sport are excellent partners and provide fantastic coverage and programming to bring our competition to fans in the UK.”Richard Masters, CEO, Premier League
Initial reaction from the English Football League was that the renewed deal of the Premier League will “preserve the status quo of an unbalanced, unsustainable, and unfair financial distribution model” and will “threaten the long-term viability of EFL competitions and clubs in the Championship, League One, and League Two”.
Selling media rights without an auction is not a precedent for the Premier League, but following a ruling from Brussels in 2006, that practice was avoided. After Brexit, it is the Government that holds the key.