You’re probably not Raheem Sterling, but if you are, you’re may be feeling pretty good about yourself right now. Talks about a new contract for the Liverpool forward have dragged on for months, with the 20-year-old said to be in no rush to sign a new deal. On Tuesday, his patience paid off.
That’s when the English Premier League revealed it had sold its domestic television rights from 2016-17 through 2018-19 for 5.1 billion pounds, a 71 percent increase from the previous deal, which itself had been a huge increase on the one before. And the one before. Etc.
That throaty “vroom” sound audible in the background during the league’s press conference? That was the noise of player agents around the world driving new vehicles out of luxury car dealerships. The simultaneous crashing sound outside Anfield was the collapse of the club’s negotiating position with the aptly-named Sterling, as well as just about everyone else.
Translated into currency that doesn’t have a picture of an old woman wearing a crown on it, that’s $8 billion for broadcast rights over the next three years. And that’s just in the U.K. If we look at Google Maps, we can see that there are approximately … quite a lot of other countries in the world. And the EPL is popular in most of them. So let’s assume conservatively that the next lot of international rights will be worth another [tries to count using fingers; runs out of fingers] $1.5 billion per year. Conservatively.
That translates to a figure in the soccerballpark of $4 billion a season for the EPL and its 20 clubs (plus parachute payments which go to relegated clubs, though those parachutes are going to be pretty heavy, what with being stuffed with gold bullion). That’s about $200 million the league could distribute to each club per season – comparable on a per-club basis to the NFL, which has richer domestic deals but 12 more teams. And again, that’s with a is very conservative international estimate.
At some point, it’s like counting the number of stars in the Milky Way. Maybe there are 400 billion. Maybe 450 billion. Clearly, that’s a big difference, but the number is already so staggeringly large that it’s impossible to fathom.
It’s been the best part of two decades since players’ salaries were inflated vastly beyond a figure the average fan could relate to. Wayne Rooney earns $370,000 a week, before bonuses. Are we going to care that much if he raises that to $500,000? All EPL players are now rich enough to have thrones and butlers, like Dudley Moore in the 1980s classic, Arthur.
The tipping point, if we ever reach it, won’t be about values. Even $150,000 a week is an obscene amount of money for anyone to earn, in any profession. But we didn’t stop watching the Premier League when Sol Campbell became the first player to break the 100,000 pounds a week barrier in 2001. The EPL only grew bigger.
So we won’t be put off when someone, before long, gets four or five times that amount. It’s too late to take the moral high ground. That should have happened long ago, when it became abundantly clear that clubs will keep jacking up ticket prices despite their increased income from TV, which has massively diminished the importance of matchday revenue. It should be obvious that when clubs make more money, it goes straight into the players’ pockets – that some owners are so rich, they can absorb enormous losses.
If we want to silence the guilty voice in the back of our head that whispers “think how many hospitals you could build for what’s wired into James Milner’s bank account,” we simply have to remember: this is the free market. Players provide entertainment, no different to Angelina Jolie, JK Rowling or Jon Bon Jovi. If we want to lower salaries, we have to take an overarching approach as a society, not pick on players because some anachronistic view of soccer makes them easy targets.
Nor do vague, do-gooder wafflings about the need to put more money into the “grassroots” have any influence. The lower leagues are unsexy and get little media coverage, but teams very rarely go bankrupt. The crowds and standards of play are surprisingly high, giving little sense of a crisis that will require some sort of bail-out from Big Sugar Daddy EPL. Yes, the England team is crap, but whatcha’ gonna do, eh? Get Sunderland to fork out for some floodlights and showers at some inner city field in the hope that the investment will produce the next Cristiano Ronaldo?
Clubs are going to spend that money on enticing talented players for the first-team in the here and now, doing your best to respond to the demands of fans to produce the best side possible. In that way, they’re a like big banks: lightly-regulated, selfish behemoths focused on the short-term, addicted to making more and more money, who would find themselves instantly in crisis if profits ever stop rising because their whole business model relies on income increasing year after year.
No, it’s not values that will stop this staggering rise in broadcast revenue, time after time; it’s value. As in, value for money. The Premier League may seem immune to market forces, to recession, but that’s a mirage, since its boom is being financed by companies that live in the real world. The means answering to shareholders and, in time, adhering to bottom lines.
One day, perhaps there won’t be a bidding war between rival media giants that ramps up the price of live rights. One day, perhaps companies such as Sky and BT will decide that Premier League soccer is no longer worth the money. That they don’t want to overpay any more, because the price has reached the point where it doesn’t make financial sense. ESPN came to that conclusion in the U.K. a couple of years ago.
The appetite for Premier League soccer may well be insatiable, but eventually, if the sums stop adding up, the media powerbrokers who bankroll the boom will start to lose their passion for the sport. And given that clubs will have secured top players like Sterling on long-term deals that assume everyone will keep getting richer, we could be in for a messy couple of years in the most popular league on the planet, down the road.