Why £564m deal was scrapped – and what it means for clubs
The drastic step was taken amid a legal dispute with rights-holder Suning Holdings over an unpaid £160 million instalment of its £564million TV deal. The fee was due in March but Suning withheld it due to the coronavirus crisis. It then tried to renegotiate better terms, including asking for a threeyear extension. The Premier League refused and pulled the plug.
Suning Holdings Group is a conglomerate that is the third-largest employer in the Chinese private sector. Its primary businesses include retail, real estate and financial services. But it also has a sports arm and in 2016 it acquired a majority stake in Inter Milan, which it holds to this day. It won the rights to the Premier League for the 201922 seasons months later and also bought those to La Liga, the Bundesliga and Serie A.
That is certainly the position of both parties and it would appear to stack up, given that Suning laid off a large number of staff last year to cut costs. But the termination of the contract has also taken place against a backdrop of political tension between Britain and China and there have long been vigorously denied suspicions of state influence in Chinese conglomerates.
Very. It was its biggest overseas deal in the world’s most populous country, worth 12 times more than the previous contract. It accounted for 6 per cent of its record £9.2billion set of TV deals for the 2019-22 seasons. It became even more crucial in the wake of the pandemic, which had already cost the league and its clubs millions. The Premier League will be desperate to limit the damage by striking another deal that gets as close as possible to that with Suning. Otherwise, the wave of cost-cutting and redundancies could continue.
Potentially. Some clubs have still spent big this summer and if Lionel Messi ends up joining Manchester City, some may wonder what all the fuss was about. But any loss of a figure that works out in double figures of millions per club could see each of them bring in one fewer player than planned. Alternatively, they could gamble on the league quickly securing another deal in China.
Suning sub-licensed some matches to Chinese state broadcaster CCTV. So, in theory, it could step in. But how much it or another company would be prepared to pay for Premier League football at this time remains to be seen. Unless there is a bidding war, it is hard to see someone offering anywhere near the £188 million a year Suning originally signed up to. There were no indications last night the Premier League had anyone in the wings.
That has always been the ultimate fear of those who stand to make millions out of the league, which is not immune to the impact of Covid-19. It and its clubs have weathered the crisis better than many businesses but it is hard to see it securing the kind of increases in rights fees it enjoyed every three years before the pandemic struck. The true scale of the damage will soon become clear.