Government to demand pyramid payment assurances over Premier League TV rights deal

·4-min read
Discussions are ongoing - AFP
Discussions are ongoing - AFP

The Government will demand guarantees from the Premier League over pyramid solidarity in return for approving surprise plans to roll over TV rights deals.

Sensitive talks could conclude within days over proposals - first disclosed by The Telegraph - to allow Sky, BT and Amazon to continue screening games on broadly the same three-year £4.5billion term.

Whitehall is being given input and must sign off the plans, with senior figures within Government pushing for a response which could be "creatively helpful" amid the recently triggered fan-led review of the game.

The Telegraph reported on Sunday how the Premier League and broadcasters were in advanced talks over agreeing a deal without going to open-market auction.

Values were estimated to fall for the next term, but an immediate renewal by next month has some appeal to senior broadcasting executives due to post-pandemic market uncertainties. One source close to talks said on Tuesday that there may be a minor reduction in value under the terms, and that the new deal could be arranged pro-rata over two years rather than three while the market readjusts.

The Government, meanwhile, has significant clout to intervene amid the current furore around the so-called Big Six club owners following the Super League breakaway fiasco.

With tougher regulation looming, senior figures within broadcasting and sport are keen to keep ministers on side, with a plan being considered in Whitehall to redistribute money through the pyramid.

The Premier League had been due to auction domestic rights spanning three seasons to 2025 by May, but Sky and BT were widely expected to rein in their spending. Some rights experts predicted the value of the package could fall by more than £900m - to an overall sale of around £3.9billion.

The competition has sold international rights without an auction before, but such a move on home soil has not been attempted since a Brussels ruling in 2006. European competition watchdogs said then that the Premier League must sell its rights to more than one broadcaster. Now, in the post-Brexit landscape, advice and competitions approval from Government on the deal is key.

Broadcasters may yet secure a small discount which could be structured to allow Sky, BT and Amazon to retain similar positions to those agreed in 2018 when TV rights spend fell by 10pc to around £4.7bn for the three seasons to 2022. Sky spent £3.75bn on 128 live games a season, while BT invested £975m on 52 matches a season. Amazon picked up the final packages of 20 matches a season for its streaming service, Amazon Prime Video.

Insiders fear repeating the agreements could trigger complaints from potential challengers such as the sports streaming specialist Dazn, which has said it plans to explore an auction bid for the rights. Its joint-chief executive James Rushton said earlier this month that “once the tender comes out, we’ll review it”.

The implications for a private sale of domestic rights are being considered at the Treasury predominantly in light of Brexit. One senior source said the failed breakaway bid by the competition's “big six” clubs last week “has further complicated matters”.

The Premier League’s chief executive Richard Masters is under pressure to shore up income after record TV rights growth under his predecessor Richard Scudamore. Masters declared in February that he was confident in values, but BT chiefs admitted the trajectory was flat to down. A channel sharing deal struck between Sky and BT three years ago has cooled the competitive tension needed to increase the value.

Masters, who is also seeking to skewer any future attempt by a Premier League club to join a breakaway European league by overhauling the sport’s rules, has teamed up with the FA to carry out a governance review.

The scrapping of parachute payments is being championed by EFL chairman Rick Parry, who told Telegraph Sport the “best of Project Big Picture” should be reconsidered following the collapse of The Super League. Under that plan, payments would have been replaced with a cash injection that would have seen the EFL given £250m immediately, plus 25 per cent of revenue from future top-tier TV deals. The EFL is currently asking for a share of Norwich City and Watford’s £83 million parachute payments following their immediate return to the Premier League.

The Premier League, Sky, BT and Amazon are yet to comment.

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