Ken Bates' media empire

There was an interesting read on the Guardian’s website yesterday about the big money takeovers that have happened in the EPL over the last few years, and how it currently appears as though these billionaires are here to simply throw money away.

With Liverpool the latest club linked to a billionaire takeover from Kenny Huang, the Guardian questions the motives of these men who seem to be using Premier League football clubs as nothing more than expensive toys – the latest fashion accessory for the uber-rich.

The more cynical amongst us have probably been waiting for the small-print to emerge for some time. Indeed, it always struck me as odd that successful businessmen like the Glazers, Ambramovich and those that make up the Abu Dhabi group, didn’t have hidden motives for their investment – a way to earn all these billions back. After all, they didn’t become billionaires by squandering all their money on a profitless venture like an EPL club.

According to the Guardian’s, Matt Scott, it seems these businessmen aren’t burning money after all. Instead, what we currently see are a bunch of billionaires putting their money in a long-term investment. If anything, they’re pioneers who are well ahead of their time.

The fans of these billionaire-run clubs can rest assured that the big money signings aren’t going to dry up any time soon. In fact, the big money signings are integral to the owner’s long-term business plan as they excite the fans and help build the brand further. That said, the players are pretty insignificant on the grand scale, as too are the fixtures and fittings like the stadium (which is probably why the Glazer’s had no problems taking loans out on Old Trafford).

The real money is in the brand. Manchester United and Liverpool for example have huge worldwide fan bases that despite the clubs best efforts have yet to be fully exploited. Sure, they may be buying the odd replica shirt and flying to Anfield once in a while. They may even subscribe to online content like overseas Leeds fans do with LUTV, but this is simply the tip of the iceberg.

It’ll come as no surprise to most that it’s the American’s who are showing the world how sports can truly be capitalised upon. The Guardian quotes the figures from America’s biggest baseball team, the New York Yankees. A club that’s assets are valued at $1billion. An impressive enough figure, I’m sure you’ll agree, but that’s nothing compared to the Yankee’s media network, which alone, is worth in excess of $3billion.

At the moment, the worldwide and national rights for clubs such as Manchester United and Liverpool are sold by the Premier League. Leeds United’s rights are sold by the Football League – but how long will it be before clubs with such enormous worldwide fan bases want to cut out the middle man, like the Spanish clubs before them and their sporting equivalents across the pond?

It all comes down to pay-per-view. If a club like Leeds United could broadcast all their own matches to viewers across the world for a fee, then the 40,000 inside Elland Road wouldn’t come close to the money generated by the PPV income. Nationally, this could quite easily be an on demand feature where every clubs games are available through Sky for a fixed amount. The club takes a percentage and Sky takes a percentage for their part in it all.

With the EPL worldwide broadcasting rights already above the billion pound mark and growing year on year, the money is most certainly out there. Manchester United’s frequent tours of China and Japan aren’t just to sell an extra couple of shirts, but instead, it helps them increase the brand in a massive market that was largely ignored until recently.

The old English football teams we know and love will eventually make way to franchise-like brands that span the world over, and if Leeds United want to compete again, they have to be on the boat.

Luckily enough, it seems that we are. The only remaining success of Peter Ridsdale’s reign is the LUTV service he introduced. Whether he was aware of the potential of this at the time is debatable, but our current chairman, Ken Bates hasn’t missed a trick. Taking back the clubs radio broadcasting rights and charging those outside the Leeds area was a very clever – if somewhat unpopular move – that is netting the club a very healthy profit.

Tying this live match commentary into the LUTV package with news and highlights made LUTV a very saleable package backed by the Leeds United brand. For all those tens of thousands of Leeds fans exiled abroad, LUTV is an absolute must have.

It won’t stop there either. Whilst stage one of Bates media may have netted a healthy enough profit for Leeds United, its absolute peanuts when you consider the potential. Following in the footsteps of American sporting teams like the New York Yankee’s, Ken Bates has already tested the possibilities of live worldwide PPV streaming, and whilst there’s plenty of kinks to iron out, this will have done nothing but wet his appetite.

If Bates can charge £5 a month for pre-season friendlies and get thousands upon thousands of fans happily digging deep, just imagine the money to be made from live league and cup games being streamed around the world.

There’s a few stumbling blocks to overcome before English football clubs take full control of their own media rights and start selling independently across the world, not least of which will be the Premier League restructuring to a franchise operation like the NFL. Sky Sports will also have to figure out how they’re going to make money from it all when the clubs become more powerful than the network.

The danger for Leeds United at the moment is our current league position. Leeds United as a brand is much more marketable as a Premier League club, and if we’re not back in the EPL by the time the technology is in place to implement these changes, we may find ourselves struggling to compete with other clubs financial clout forever.

  • Ellie The Elland Road Elephant

    “Taking back the clubs radio broadcasting rights and charging those outside the Leeds area was a very clever – if somewhat unpopular move – that is netting the club a very healthy profit.”

    No, it isn’t netting the club a profit.

    According to the most recently published accounts, Yorkshire Radio has recorded losses of £1.4m over the last two seasons.

    • TSS

      Yes, I remember reading these, but the figures make no sense. From what I gather, the money made from LUTV was covered under a different figure and how exactly Yorkshire Radio lost such an amount of money is anyone’s guess. All I can assume is the club have switched debt from elsewhere?

  • TheReaper08

    Not a lot makes sense with accounting at ER but if Bates is persisting with it then it’s either an efficient tax dodge or it turns a profit.

  • les irwin

    before football becomes a franchise if it does even , Bates will be dead and buried bates isnt intrested in the future he is intrested in the now and tying to get fans to buy now .manu lpool celtic and 1 or 2 others have decent tv channels available on the tv rather than on the computer .lutv coverage picture wise is ok but commentary both on that and yorkshire radio are at best hospital radio the chap who fronts it and pitch side on match days looks like one of the banana splits the interview with bates on saturday was at best bloody awful
    i would pay to watch a meaningful channel on sky or virgin but not that rubbish on the pc

    the best of these channels is chelsea tv or manus offering

  • TSS

    @number1inyorkshire

    Unfortunately, there’s little Bates can do to sort the countries broadband out, but we’ll be ready when they do. Was talking to Svend from Norway (i think?) the other night on Twitter and he says this is already commonplace over there and England are living in the stoneage.

    • les irwin

      fantastic idea i think that sky and others have been great for football but if they are not showing a game why shouldn’t someone else
      they should get the pick then others show the rest leeds would sell on bbc yorkshire .itv regional etc etc or lutv on the tele though not the pc

    • les irwin

      i have 50 meg broadband top of the range its just so amateurish at lutv

      • TSS

        Doesn’t matter how quick anyone’s personal connection is, it’s all the infrastructure throughout the country that it uses to reach you that lags connections – but as BT Vision and co are proving, OnDemand streamed media through your broadband is the future.

        PS. Still not Bates’ biggest fan either so you’re preaching to the converted my friend.

  • les irwin

    forgot to mention BATES is a tax dodging ,leeds pilfering ,accounts switching lying S O B

  • Costadelwhite

    Great article… nice to think my fivers and two LUTV subscriptions for my son and I in Spain might be helping put us back in the big league category again! Every little helps I guess!

  • Paul C

    Didnt Yorkshire Radio appear as a significant creditor in the list of creditors that had significant voting rights during the CVA process?

    They demanded nearly half a million for services they provided to the club so they cannot have anything to do with the Leeds United Football club business surely? They supply a service for which they get paid (Or don’t according to the accountants at the time of the CVA)

    I do agree the accounts take some understanding, if only they were explained as well as the clubs ownership has been explained on the clubs official site ;-)

    • TSS

      @paulc

      Bates owns Yorkshire Radio. They were a major player in the administration/-15 point saga. Alongside those illusive creditors, Yorkshire Radio helped secure the percentage required for FSF to take/regain control.

      • les irwin

        so if bates owns yorkshire radio how come he got to vote to buy back the club he put into admin
        god i hate him

        • TSS

          Because he doesn’t own us (allegedly), the mysterious people who make up Forward Sports Fund do.

  • TheReaper08

    @number1inyorkshire Me too but it’s very very clever even if it’s not unique. I note that Pompey were heading down the drain until a mysterious ‘extra’ amount of debt was found that lowered HMRC’s percentage thus nulling their voting rights.

    Smoke and mirrors my friend, smoke and mirrors.

  • les irwin

    do you know tss i had lost the will to get involved in this on going saga but iam gonna try and buy shares somehow in one of those companies .it may beat me but god im gonna try

    • TSS

      @number1inyorkshire

      I wouldn’t bother mate. You’d come off better doing business with the Teliban.

      • les irwin

        i think bin ladin is more popular than bates

      • Dje

        @TSS

        Teliban is my new favorite typo.

        ‘Tellyban’ would have been even better considering the context.

  • Tim Wilsom

    Beggars can’t be choosers, banana splits or not, my 80 bucks is goin in the mail this week. Hope we don’t lose too many games, Eddie Gray gets so fn depressed :(

    • les irwin

      its hard for expats and you have to do what you do i live 20 mins from ground im lucky cant you get some cable channel with everyything on over there for free

      • Tim Wilsom

        Actually got 4 games on telly last season Kettering, Spurs ,Scum an Bristol. Championship gets a bit of coverage , Derby game’s on. Mainly prem, and Sky sports for highlights

    • Dje

      I love Eddie Gray and his mopping – I can just picture the dour Scottish mugshot of him (somewhere between Gordon Brown trying to smile and the dying gasps of an Arbroath Smokie) as he gets all narky about our latest defensive ineptitude, all the while in the background Tom Kirwin is trying to buck him up with an offer of getting the pies at half time.

      It’s Gray’s barrage of “yer know’s” that haunts me in my sleep. Seriously, once you’ve locked-in to how often he says these two words you forego the rest of the commentary as you increasingly cringe as he lets slip the next “yer know”.

      Or am I the only one to be tortured by this?

      • TSS

        Even I’ve noticed in the little bit post-match commentary I sometimes catch and agree it’s infuriating. Beckham does it too in between his “erm… well, obviously…” line

      • timm

        He’s a god & he can say what he wants! It’s just because he’s a footballer yer know & not a naturally gifted commentator.

        • Dje

          @timm

          True, he’s better than than Lorimer, who sounds like he’s had a couple already and is noticeably slurring after halftime.

  • steve

    im not ken bates biggest fan but lets check things first we were going down the pan when he came in no one else was ok its been a bit rocky last 4 years but we are now back in champioship ok bank balance good side this year so lets give some credit to the man

    • danny

      Bates didn’t do it to save Leeds United, he saw the oppourtunity to make some cash. Do you really think he would pass up the chance to buy one of the clubs with the biggest fan bases in the country going cheap? I don’t.

      • timm

        Yawn Yawn, here we go again. It’s all Bates fault that we got promoted & have brought 8 new faces in this summer despite not being able to offload any of the overpaid shite brought in by previous managers who Bates trusted in the transfer market. You’ll not find too many clubs who’ve brought in as many players as we have, free or otherwise.

        • TSS

          @timm

          Fair point Timm, and as my post the other day pointed out, not many teams have spent money this summer.

          PS. In the interests of levelling off all this Bates lovin’, I must add, he’s a c*nt.

          • timm

            Agreed! but he’s a c**t who looks at the books every week & sees over 40 grand going out to Sheehan, Kandol, Michalik & Robinson.

  • spanish white

    Don’t use LUTV any more.Poor comentary & reception .Use other sources now.But if it was agood set up, would go back.

    • Knick

      Hey there, i’m in Korea ( posted about this before) and the receptoin we get is aweful, it buffers every 2 minutes! Spanish White, could you share your ‘other sources’ with a fellow fan?

      Ta,
      KN

      • AussieWhite

        I’m in Australia and I watch the games on Justin.tv or if they are being shown live on BBC or ITV for the cup games then I watch them on filmon.com.

        Of course, because we are so popular over here, Fox tend to show them live anyway. Such as the Derby and Forest games are both being aired over here. MOT

  • Jack

    Agree – A good live PPV stream is where its at. Whats we’ve got so far is far from desirable.
    It also reflects on the LUFC demographic – slightly older and higher disposable incomes than the glory seekers who worship clubs more successful in the recent years.

    Knick (Korea White),
    Greets from the PRC
    So have you tried myp2p DOT eu?
    Anytime there have been live games on I’ve always got good links off that and no probs with speed.

    I thought broadband speeds in Korea were best in the world?

    • Knick

      Hellllloooo!

      Yeah it’s super fast, but as TSS has said earlier, it’s the crappy server that LUTV use in the uk that is naff! I can download a full movie in 10 minutes…not that I would cause the advert at the cinema tells me it’s as bad as breaking into someone’s house, beating them up, smashing their car up and kidnapping their children…I wouldn’t do that so why would I download a movie! :)

      I’ll give it a try though on p2p, should be easier this year as more of t he games will be on sky too!

      Nick

  • colin

    Forward Sports Fund……..FSF…..Freddy Shepherd..Does anyone know if Freddy Shepherd is a silent parrtner ?

  • Matt BB

    has anyone else cottoned on to how seemingly you can now get away without having a formal CVA in place to exist administration? Didnt Portsmouth manage to swerve round that bullet?

  • les irwin

    from what i found out that a director of chateau fudiciare in switz is a chap called jeremy rothwell who went to birmingham uni in the 80s that is not to say he has owt to do with fsf .then there is murrin who was made to retire cos he was dodgy by the powers in jersey there is a connection with this rothwell chap in jersey ?? then there is boatman surely the people who own the other 27+% should be named some where

  • Matt BB

    @TSS hold the front page, I take it all back! it appears Betfair may be right on the subject of a loan signing of Steven Caulker from Tottenham..

    • TSS

      @mattbb “D-d-durrrr” (that was my attempt at dramatic revelation music)

      • Matt BB

        Well it wasnt a striker and to be honest they have linked us with everyone else.. they had to get it right once!

  • steve underwood

    everyone seems down that we did not sign hooper or any other striker but i think the team look strong plus the back up dont look to bad think we will do well this season top 10

  • Matt BB

    @banditsteve123 I’m feeling a little more confident myself, do we need a replacement for Beckford – was he in fact not the cause of many of our weaknesses in terms of the team we sent out each week revolving around feeding the ball to him?

  • Operation Facebook

    I love anything & everything that is brought forward well… yeah you got some good content going on there for sure.