Premier League collective selling: the beginning of the end?

If the Premier League’s broadcast proposals extensively reported in yesterday’s press go ahead as planned, they may mark the beginning of the end for collective selling of rights – which is the glue that has kept clubs as diverse as Manchester United and Bradford City together.

Ostensibly to comply with competition law, the main collective live TV deal (from which the smaller clubs benefit) has stayed more or less the same (66 matches) but delayed pay-per-view and internet elements (which the bigger clubs can best exploit) have been separated out and given to individual clubs for the first time.  As a result, the main collective live TV deal will be worth less as there will be no ability to “lock out” competition as extensively as before because of the availability of more delayed rights.  The consequence is likely to be that the rich will get richer quicker and competitive balance within the League (already under pressure) will be stretched to breaking point.

It is debatable whether compliance with competition law requires these new proposals.  The OFT’s concern about the current deal with Sky was that the exclusivity which the Premier League delivered collectively enabled less matches to be broadcast live.  The new individual rights will enable more matches to be broadcast by those able to do so but they will not be live matches.

The Premier League’s whole argument in favour of collective selling (and the attendant restriction on the number of live matches broadcast) before the Restrictive Practices Court last year was based on the need to maintain competitive balance within the League.  This argument was successful in fending off the OFT’s attempt to end collective selling by the League on the basis that it was a cartel.  Although some individual selling is now to be permitted, under the new proposals, we are left with a restriction on the number of live matches broadcast, the revenues for which are still distributed unequally.

Logic therefore suggests that the OFT will attack the new arrangements (or get the EC Commission to do so if it has legal difficulties).  If such attack occurs, expect the big clubs to break rank and go to individual selling of live matches straight away.  If the attack doesn’t materialise (because politicians don’t want to trigger a break-away) it is still difficult to see Manchester United and Bradford City as bed-fellows for much longer once the proposals take effect.

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