Where can I watch Arsenal on television?

How the £30m in increased television revenue is shrinking by the minute

Back in the Fall of 2012 the Premier League announced a bumper new television contract that was set to top £5bn for the first time ever. This new contract included huge revenues from domestic television rights and crazy new money from overseas television rights. My American readers, for example, will be happy to learn that the Premier League has finally outgrown the shackles of Fox Soccer Channel and will now be part of the NBC Sports family.

The reason I break both of those domestic and overseas rights out as different contracts is because they are divided among the 20 teams (minus parachute payments for relegated teams) in two different ways. The domestic rights are divided on a 50:25:25 scale with top teams taking more money and bottom teams less based on appearances while the foreign rights are divided evenly among the 20 teams. What this means in practical terms is that the winners of the Premier League will be earning £26m more from the domestic rights and the losers will only earn £13m more. But when you add in the additional £7m for foreign rights that every team gets (us bloody Yanks!) the League winners still “only” earn that same £13m more than the bottom team. That means that the worst team in the Premier League is now guaranteed an additional £20m per year. And… the relegation teams also get a kicker to their parachute payments of about £8m the first year £6m the second, and £2m the third.

From an Arsenal standpoint this means about an additional £30m per year or about £10m more than the League losers. But this fact that suddenly every team in the Premier League gets at least an additional £20m in television revenue every year had me wondering. Is that actually additional revenue or is it just inflationary? Let me put that another way. Santi Cazorla cost Arsenal £16m in transfer fees and starting next year every team in the Premier League will be able to buy their very own Santi Cazorla, but there’s only one Santi Cazorla, what happens to the price of Cazorla in that situation?

Granted, not every team will want a Cazorla. Also, not every team starts in the same financial situation. And further, some teams will not really be competitive for players like Cazorla because they can’t give him the higher profile (read: more endorsement money) that a club like Arsenal can offer. And finally, of course there is the additional £10m in TV money that Arsenal get. So, there’s still a competitive advantage for the big clubs like Man U and Arsenal.

Where can I watch Arsenal on television? GREAT MOMENTS IN GUNNER’S HISTORY: Vassiriki Abou Diaby nearly kicks John Terry’s head clean off.

I warned of something similar before when the Premier League introduced their foolish “25 man rule”; that such a change would only drive up the price of English players. And of course what we have seen is an explosion in prices teams are willing to pay for that all important “homegrown” passport. And I’m saying something similar now: this so-called “extra” money from television revenue is only going to drive up the prices for the types of second tier players that Arsenal shop for.

Cazorla at £16m already looks like a good deal but in two year’s time, £16m for a player like Cazorla will look like an absolutely genius buy. And Michu at £7.5m will look like some kind of mastermind.

So while Arsenal fans are all excited by our “extra” £30m, the rest of Europe is quietly stocking up on caviar and champers. Because with all of the analytics, the cash, and the exposure of the Premier League to the global market, uncovering the next Cazorla is going to be increasingly more difficult. And uncovering the next Vieira will be impossible. Well, it won’t be impossible, everyone will know exactly who he is and the big, big money clubs will be ready with the big, big money offers. Getting the next Vieira for next to nothing is what will be impossible.

Qq

23 thoughts on “How the £30m in increased television revenue is shrinking by the minute

  1. Vote -1 Vote +1Phil

    It’s is a countervailing inflationary pressure with respect to Premier League teams, but its a real increase in purchasing power compared to teams in other leagues.

    1. Vote -1 Vote +1Tim Post author

      I disagree, especially for Arsenal. We already know that a player being purchased between two tier-two European teams is valued differently than if that same player is going to Arsenal and even more differently than if he’s going to Chelsea. Moreover, Premier League teams already pay a premium for players over their rivals in the Bundesliga, France, and Spain: Ozil went to Real Madrid for €15m, Hazard went to Chelsea for €40m. Now, I might be way off base but I think Ozil is better than Hazard and transfermarkt.com has them as valued exactly the same. I think there is an inflationary premium for Premier League teams. And now with more money I would suspect that they would pay an even bigger premium.

      This is all just me prognosticating and I could be wrong, but I’m rarely wrong about this sort of stuff. :)

      1. Vote -1 Vote +1craig

        I think regarding your Ozil/Hazard example the effect you’re really seeing there is the Real/Barca discount: Fab was worth way more, Ozil was worth more, Sahin was worth more… when a player makes up his mind to go to those sides after being tapped up, it forces the team to accept less. Chelsea, of course, don’t have the prestige to exert such influence. Look at the price the Russian teams have paid (such as for Willian!) they pay as much as the English, Schalke and Bayern have shelled out recently as well. PSG also pay top dollar of course. Barca have already started tapping up Neymar, and will certainly pay less than Man City would to land him. But it’s because they’re Barca, not because Man City is in England.

        I agree with Phil that the advantage of increased revenue will be in strengthening relative to Europe. When the tax rate increased, the BPL started losing many of their targets to European teams, after a couple year period where the best in the EPL could beat almost anyone to any player they wanted (which resulted in 3 out of 4 Champs League semi-finalists being BPL). Man City and Chelsea being the glaring exceptions, but Arsenal and other teams that had to function on some sort of budget saw a real loss of buying power. Obviously Barca, Real, PSG will maintain their lure because of their vast wealth, but this should help fend off the advances of some of the Bundesliga teams, some of the Russian sides, even teams like Marseille, many of whom who have picked off the promising but not absolutely sure fire talents that would have previously been bought by Arsenal or Liverpool. It won’t be a cure all, Anzhi will still have crazy money, but it will help. I think we’ll definitely see inflationary pressure overall as you described,Tim, but partially balanced by a strengthening versus leagues with less lucrative TV contracts… many of whom have been gaining ground since the tax rate increase. Teams like Ajax will be less able to hold onto their talents, but the price will be higher than it would have.

      2. Vote -1 Vote +1Gunman

        While I agree there are two different prices for a player for a top team and tier two team. But I have to disagree with the notion that English clubs pay a premium.

        Ozil was sold for 15 miliion because he was in the last year of his contract , same reason why Sahin was cheap . Otherwise you look at transfers Madrid paid 27 million for relatively unproven Conterao , 40ish million for benzema and a huge price for modric as well. Similarly barca paid 25 million for a Cb chingrsky from shakhtar and paid premieum for Ibra, and Psg paid Astonishing 51 million before incenties for Ibra and thiago silva. And these are off the top of my head.

      3. Vote -1 Vote +1Phil

        The “English premium” might actually be a sucker’s tax. You look at the top 10 transfer fees paid by British teams and only 4 of the 10 seem to be rate as better than “nearly disastrous”(Rooney, Aguero, Ferdinand, and Dzeko), and only 3 you could say rate as value for the money(scratch Dzeko).

        Whereas you look at the top 10 in European history, and honestly, they mostly look like decent buys.

    2. Vote -1 Vote +1Phil

      Actually, I may be wrong about the Premier League effect as well. There are restrictions on how that money can be spent, ie. it cannot be used to raise salaries very much, which means its inflationary impact is muted by the fact that most teams cannot raise substantially increase funds via other means, i.e. commercial deals, Champion’s league money, matchday income.

      This advantages United, due to their commercial prowess. Though, it has to be said one wonders how much more they can raise. So perhaps the primary beneficiaries of the tv monies are teams with heretofore unrealized commercial opportunities, i.e. teams that may have been locked into unfavorable commercial deals due to stadium financing.

      City has already signed its wildly overvalued commercial deals and it still can’t pay the bills. Chelsea only turned a profit because it won the Champion’s league and Abramovich took a one time debt for equity swap. So it seems like FFP restrictions, both from UEFA and the FA mean that they have to bank most of the money. They can’t actually spend it. I think.

  2. Vote -1 Vote +1Nikki

    I always thought that this TV money is rarely used for players purchases. Obviously, that is because my paradigm is tainted by the Arsenal, but I thought that the increases in the TV money will be used for an in house expenditure. The in house expenditure is increase every year, so I heard by the man that is Ivan Gazidis. So, I don’t know it does not necessarily could make all the clubs have the financial to buy the 15 millions rated players and cover his wages. But I can see that it might come true. The good thing is it will close the gap between the sugar daddy club and the masochist club like Arsenal.

    On Ozil, I think it comes down to the cub that want it or the player preferences. Newcastle pay a penny for players like that. M’villa is sold cheap because of his attitude that made many clubs stay away from him. Martinez was bought very expensive just like Neuer, Gomez, and Ribery for example. Neymar seems to be another player whose price is going to rise high by the competition of the clubs that want him. Fabregas or Reus also the type of players that sold cheap because of the players preferences.

  3. Vote -1 Vote +1londoncalling12

    Hello Tim

    I don’t submit comments as often because I cannot open your site on my Kindle….which I use instead of a smartphone. (FREE 3G any where in the world)

    “Getting the next Vieira for next to nothing is what will be impossible”

    I don’t know ….just look into the Reserves of most team in Europe and you will ( probable) find a nugget waiting to shine at a low cost who when polished well enough can be another Vieira.

    I know everyone knows everyone in Europe….but I’ve never heard of Nacho Monreal before 31 Jan 2013.

    In summer 1995, Vieira was signed by Milan and played in their Reserves with only two first-team appearances….but someone was watching him….Arsene Wenger.

    I would like to think Arsene Wenger can find another Vieira….a strong tall athletic urban young man and make him into a star……Maxime Gonalons maybe!!!!.

    But I take your point about the economics of the fee; £3.5 million for Vieira….with inflation and the increase in the value of money ( premium) ….say £16m for Maxime…. bargain in the making…who knows….maybe Arsene knows.

    I just watched the Bayern v Dortmund game….and I must say their midfield are mini defenders in there own right. They protect their back four with precision and speed, I remember Petit and Vieira doing just that for the Arsenal.

    I fear for us on Sunday….I suspect we will lose this game…not because of Bale…but because of our midfield/defence and the speed of Spurs.

    Laters…Sorry about errors in grammar…

  4. Vote -1 Vote +1xJane

    Tim, what are you trying to say? I’ve been reading daily for about a year now and I think I’ve read…

    1. Arsenal need to spend 100-120 million in order to compete for a title. And they have the money.

    2. There are inflationary pressures such as home grown status and revenue sharing.

    If this post is about it being unlikely that Wenger will be able to find undervalued gems because money from all over will be flooding the market, that is one thing.

    But I thought you were a proponent of having Arsenal spend market rates for talent. Mata cost 23 million and Alonso cost 30 million. And yes, sometimes the markets are nutty, so Andy Carroll cost…

    The bottom line for me is that Arsenal needs to spend 100-120 million and I believe people who say that they have the money. If that number becomes 120-140 because of inflation, well, maybe we should have bought Mata when he was “only” going for 23 million.

  5. Vote -1 Vote +1Ken

    Why should I be happy with the Premier League on NBC? It is not that long ago that this esteemed network(Ha Ha) was showing commercials during the action on Olympic football matches.

    1. Vote -1 Vote +1Westy

      So because NBC had commercials during the Olympic matches that means they will do so with their new hugely expensive BPL games, which they would want to be as attractive to viewership as possible? I dont think so. They have done MLS games for the past year and, of course, havent had commercial breaks during the game.

      Besides, have you ever watched a game on FSC? It’s literally impossible for me to watch a pre-game, halftime, or postgame without the mute on. Not to mention how they constantly put up the largest and most poorly placed graphics I have ever seen, especially the ‘team colors’ graphic, which only gets put on the screen once every 5 minutes. As if I forgot within that time, or couldn’t just look at the score icon that has both teams names written over the top of the colors they are wearing for that match.

      The only way NBC could be as bad as FSC is if they let Eric Wynalda anywhere near their studios. God I can’t wait to see those clowns off the air.

  6. Vote -1 Vote +1Tee Song

    I don’t see how BPL broadcasting revenues are ever going to be the difference between a BPL champion and one that is relegated. As you point out, that income is relatively evenly spread to all the teams. It does increase the spending power of the BPL relative to other leagues but it makes little difference between the teams in the BPL. What does make the difference between a BPL champion and being relegated to the Championship is the differences in the other two income streams of a football club, match day income and sponsorship income. Here is where the Deloitte figures actually could be encouraging for an Arsenal fan.

    Arsenal are one of only four clubs in the entire world who’s match day income exceeds €100M. There’s only six clubs in the world who’s match day income exceeds €56M which means that outside of those five other clubs, we at least double the match day income of every other club in world football. And without investing substantially in a new stadium (or charging significantly more which may cause attendance to drop), other clubs will not be able to catch up to us.

    It’s the sponsorship deals which Arsenal need to improve. We sit eleventh in terms of commercial income and our €65M pales in comparison to the teams which sit ahead of us in the “money league.” If we could get our commercial deals to 2/3 of Bayern’s which would essentially double our current commercial earnings to €127M, we would, with our superior matchday income and superior BPL broadcasting income essentially match Bayern in overall income. And look at the team Bayern have managed to build. Considering that Liverpool’s commercial earnings are at €99M and ManUre’s are €145M, it isn’t completely outside the real of possibility.

    http://www.soccerblog.com/Deloitte%202013%20club%20revenue%20streams.png

    1. Vote -1 Vote +1feygooner

      Yeah, and most sources give Cazorla as ~£12m, not £16m. And since we’re on the subject, Sissoko cost £1.5m and Gourcuff £5.5m.

      Since most lower PL clubs tend to buy from within England, I think it will mostly result in less transfers from, say, Fulham to West Ham.

      For the top guns (am I allowed to include Arsenal in this?), it should mean more spending power.

  7. Vote -1 Vote +1marek

    This analysis makes it all the more imperative to grab talent very early, or develop your own. Incidentally, something Arsene’s been trying to do for years at Arsenal.

  8. Vote -1 Vote +1Tim Post author

    Why is it that in any article about Arsenal finances there is always a raft of people who spend an extraordinary amount of time trying to disprove that Arsenal have money to spend? The club says they have money. The balance sheets says they have money. The board brags about buying big named players. The team has even borrowed in order to buy before (Bergkamp). And yet, every single time I write an article urging the club to fill the gaps in the squad, gaps that we all know exist, every single time, there are a bunch of people whose sole comment boils down to either “Arsenal don’t have any money” or (recently) “Arsenal don’t have as much money as you think.”?

    It smacks of an agenda and I hate agendas. I don’t have an agenda when I write these articles, well, except that I would like my team to do the best they can and I don’t consider “having £125m in the bank” the best they can.

    I’m not a Wengeroutist, I’m not Usmanovist, or a Deinist. I just think the club should improve the squad. Surely we all, as Arsenal fans, can agree that we just want the best squad.

    And now you’ll tell me that the reason you deny the club has the money is to prove to me that this is the best squad that we can get. Well, I categorically reject that. This squad could be better, much, much, much better. And I happen to believe that spending the money that they tell us they have is one of the best ways to do that.

    No one complains about the fact that Arsenal bought Monreal, do they? Clearly, the squad has room for improvement and the club has money to improve it.

    1. Vote -1 Vote +1Talker

      Great post and I agree with most of your comments! But what do you think about the ability of Wenger and the board to spend the money wisely at this present scenario. We have the money as seen in the ease of spending it on Monreal(whom I really rate!) but that came after wasting 6.2 million on Santos who will be taking in atleast 30k of Arsenal subsidized wages while playing in Brazil for 2 more years while we pay wages for 2 more left backs. And to add to that the Park’s, Bendtner’s, Chamakh’s who still have a year or more left. The wage bill has already crossed the 150 million mark. Do you think we can spare the money we have to spoil more on Wenger’s socialist follies? I believe that Wenger helped Arsenal a lot with the financial situation but don’t think keeping him any longer is gonna help in the financial front itself which we all agree is one of the major reasons for the fans faith in him. I am not an Usmanovist or Deinist myself but believe that Wenger is now failing in the thing that is shown to be his biggest strength and when we have money but still limited compared to the gas guzzlers, we should invest it wisely instead of 4 years down the line, we muse at the irony of the Citeh’s actually reducing their wage bill to below ours after all the FFP prodding.

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