The already giant financial gulf between Premier League and The Championship will get a whole lot bigger when the new Premier League TV deal comes into effect at the start of the 2013-14 season.

With most analysts predicting a levelling-off of the fee paid for English football, the 70% price rise for domestic broadcasting rights came as a huge shock to many. Under the current deal, Sky and ESPN pay £1.8bn to show Premier League football from 2010-2013. This time around, Sky & BT will pay an incredible £3bn to show three seasons of top flight action

The FA Premier League chairman Richard Scudamore put this into context as he revealed an extra £14m per season would be the absolute minimum each club could expect to receive.

All this, and the sale of overseas rights is still to come. Sporting Intelligence predicts that the overall figure could reach £6bn and that the winners of the Premier League in 2013-14 could be looking at a windfall of £120m – almost double what Manchester City received for their heroics last season.

The implications for teams outside the EPL could be devastating. As relegated clubs come down with even more cash and presumably higher parachute payments, very few teams will be able to compete with their financial clout.

It’s easy to make an argument for redistribution of funds down the leagues, but English football sold it’s soul a long time ago. It’s strictly business nowadays, and the reality of business is that some position themselves to be in the right place at the right time, whilst others get caught napping and miss the gravy-train.

The vast sums of money being thrown at English football are a direct result of it’s popularity, but that popularity – particularly overseas – doesn’t extend too far beyond the top flight. As interest in the Premier League continues to grow and the money involved soars, the rest of the football pyramid can do nothing to reverse the trend. The gap will only widen.

For Leeds United’s ongoing takeover/investment talks, this could have some huge implications. Businesses aren’t sold purely on assets and current turnover, the potential for growth and higher revenue is also considered. With even more money now available for achieving promotion, the asking price of the club could rise and this would undoubtedly cause further delays.

However, there could also be a positive angle. The mega-money TV deal is bound to catch the attention of investors across the globe, who will be looking at ways to secure their slice of the pie. There is some evidence to support an increase in investor interest already with Forbes predicting an even larger windfall for Manchester United when the Glazer’s float part of the club on the US Stock Exchange.

It’s only natural that the more money a business can generate, the more people will be interested in purchasing it. Compared to what it would cost to buy most Premier League clubs, Leeds United are ideally positioned to be bought-out “on the cheap.” After a few million pounds injected to build a promotion winning squad, the investors would be sat on an absolute gold mine.

But timing is everything. If Leeds United get left behind, the financial gulf will widen and what could have been a relatively low-risk, low-outlay investment will become a much costlier situation as the Championship starts to fill up with relegated teams benefiting from their Premier League pay-day and ongoing parachute payments. Leeds United need to act fast.

Leave a Reply

Your email address will not be published.