Cash-rich Premier League weighs spending curbs

LONDON Thu Nov 15, 2012 5:32pm GMT

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LONDON (Reuters) - Premier League clubs discussed plans on Thursday to ensure that a huge injection of cash from broadcasters around the world ushers in an era of greater financial stability.

Having secured a domestic television deal worth one billion pounds ($1.6 billion) per season from 2013 - a 70 percent increase - the Premier League has since negotiated a series of improved overseas agreements including one with NBC in the United States.

That has fuelled optimism that overseas TV income will comfortably beat the total of more than 1.3 billion pounds generated in the three-year cycle that ends in 2013.

"If you factor in 40 percent growth, you get to around 2 billion pounds, that seems eminently possible," said Alan Switzer, part of the sports business team at Deloitte.

ESPN Star Sports, owned by Rupert Murdoch's News Corp, is believed to have retained the rights in India in the latest agreement, expected to be confirmed this week.

The trick now for England's top 20 teams is to ensure that the latest cash infusion does not translate straight into higher pay for players and bigger commissions for their agents.

WAGE COSTS

Total club wages ate up 70 percent of record Premier League revenues in 2010-11, according to a study by Deloitte, leaving very little over in terms of profit.

Measures to ensure clubs curb losses, known as "Financial Fair Play", have been agreed for Europe's top teams and were on the agenda when Premier League clubs held one of their regular meetings in London on Thursday.

The clubs looked at options including introducing a break-even requirement and forms of wage restraint, without reaching any final conclusions.

There is thought to be a broad appetite for tighter financial discipline but 14 or more clubs need to back any proposal before it can take effect.

"We are supportive of proposals broadly mirroring Financial Fair play which obviously we abide by already," Manchester United executive vice chairman Ed Woodward said as the club presented its financial results on Wednesday.

Along with TV cash, English football has been transformed in recent years by money poured into clubs by fabulously wealthy new owners like Russian Roman Abramovich at Champions League winners Chelsea and Abu Dhabi's Sheikh Mansour at Premier League champions Manchester City.

OVERSEAS APPEAL

The Premier League outperforms other European leagues in the amounts it generates for global TV rights.

It has not so far commented on how much it has raised from the latest overseas deals - with some clubs wary of flaunting their wealth ahead of the January transfer window.

English football's rich history combined with the cosmopolitan nature of many of its top clubs help to explain its appeal internationally.

Last season's dramatic climax when Manchester City piped local rivals United to the title on goal difference will also have helped to promote sales.

"The global TV rights explosion the Premier League has discussed today has been driven by England's heritage and connections with so many countries around the world," said Andrea Radrizzani, CEO of media company MP & Silva.

"The product values are high with great end-to-end football being played by the top teams," added Radrizzani, an Italian whose company manages and distributes TV rights for sports events around the globe. ($1 = 0.6310 British pounds)

(Editing by Clare Fallon and Alison Wildey)

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