Sky defend £595m for EFL as a good deal, but clubs angry at losing OTT control

November 26 – The English Football League’s Championship clubs, still furious at the £595 million TV rights deal signed by the league with Sky Sports, were sent a message from Sky’s managing director Barney Francis that the money is a fair offer and the only one that was on the table.

The five-year deal is a 35% increase on the previous one. Francis said: “We thoroughly asses the value of rights, and increased them by a third from the previous deal – no one else was willing to make this sort of commitment…”

“Our commitment, and this signed deal, will underpin the league for years ahead. The fact that the price we paid is substantially higher, when sports rights are generally receding, reflects the sustained commitment we have made to the EFL.”

Championship clubs believe that they are undervalued in this deal, arguing that many of them have significantly larger infrastructure and support bases than those in the Premier League. They have threatened a breakaway, though there is understood to be opposition from the Premier League and the FA for this.

Blackburn Rovers chief executive Steve Waggott told a supporters forum last week: “We felt, in the current market, with Amazon and Netflix coming to the table that it wasn’t at a level we should accept and felt we should interrogate the market more.

“The red button will have an immediate impact on EFL teams which is an income stream for all clubs.

“The new deal includes the red button service which is why we objected against it.

“The deal as it sits is £595m over five years and Championship clubs are distraught that the EFL board decided to sign it off.

“So we’re having further meetings to see if there is anything else we can do to enhance the money generated in to clubs because it is one of the biggest and oldest leagues in the world and should have a lot more buying power.”

EFL clubs have either joined the EFL’s own iFollow streaming platform or provide their own service. Rovers have 776 subscribers, 21% of whom live within 10 miles of the stadium, 28% live between 10-25 miles and 39% within 25-40 miles. The concern is that Sky’s widely available Red Button service will impact on attendances, especially for mid-week matches.

Alex Kelham, partner and head of the sports business group at law firm Lewis Silkin commented: “The media landscape is complicated and uncertain at the moment. Viewing habits are changing pretty radically.  The Championship Clubs which are leading the complaints about the new deal wanted to capitalise on this through their own OTT offerings.  They are therefore particularly concerned that, although they retain rights to show games which are not broadcast live on Sky via the their own OTT platform (including the EFL’s iFollow platform) Sky can also show those games via the Sky red button function.  Clubs can monetise the matches they show via OTT through a subscription model, but as they will now have to compete against the Sky red button coverage, it’s understandable that they’re disgruntled.”

“In such a disrupted market, having certainty for 5 years could be seen as a positive, particularly for the clubs in League 1 and 2 which may not be able to take such advantage of new distribution models.”

However, she warns against rushing to form a breakaway league, saying: “A breakaway league may look appealing to the top Championship Clubs which argue their fan base is as strong if not stronger than many Premier League teams. However breaking up the widely credited pyramid structure of English football could cause the whole system to topple, and ultimately lead to a less valuable football ecosystem.”

“A breakaway would be complicated and it could take years to formulate a new league.”

Championship clubs are expected to meet again this week.

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