League faces £800m blow over TV deal

Cash cri­sis looms for top flight as Chi­nese firm ditched Move fol­lows le­gal row over fees while game was sus­pended

The Daily Telegraph - Business - - Sport - By Ben Rumsby SPORTS IN­VES­TI­GA­TIONS RE­PORTER

The Premier League was en­gulfed by the big­gest cash cri­sis in its his­tory last night af­ter ter­mi­nat­ing its tele­vi­sion deal in China in a move that left it with a po­ten­tial £800 mil­lion-plus coro­n­avirus bill.

The world’s rich­est league pulled the plug on its £564 mil­lion con­tract with Chi­nese con­glom­er­ate Sun­ing Hold­ings – its most lu­cra­tive overseas deal – fol­low­ing a le­gal dis­pute over an un­paid £160 mil­lion rights fee dur­ing the Covid-19 cri­sis.

The de­ci­sion was taken dur­ing yes­ter­day’s Premier League share­hold­ers meet­ing and left of­fi­cials barely a week to find a re­place­ment broad­cast part­ner or face start­ing the sea­son with­out one.

The loss of about £300mil­lion – £265 mil­lion is said to have been paid up front – came on top of re­bates paid to all its rights hold­ers over the three-month sus­pen­sion of football dur­ing the pan­demic.

Clubs were told last sea­son those would to­tal £330 mil­lion, plus £36 mil­lion for ev­ery week the cam­paign went be­yond its of­fi­cial end date of July 16.

Cou­pled with an es­ti­mated loss of match-day rev­enue of £177mil­lion and count­ing, the po­ten­tial to­tal losses suf­fered by clubs last night were £800mil­lion.

Those losses have al­ready brought se­vere cost-cut­ting mea­sures by clubs, in­clud­ing a con­tro­ver­sial wave of re­dun­dan­cies, and yes­ter­day’s news would have sparked fears of more to come, par­tic­u­larly as sides have spent mil­lions in the trans­fer mar­ket al­ready this sum­mer.

The Premier League de­clined to com­ment last night be­yond a terse an­nounce­ment of the ter­mi­na­tion of a con­tract that rep­re­sented a six per cent slice of its record­break­ing £9.2bil­lion set of tele­vi­sion deals for the 2019 to 2022 sea­sons.

The broad­cast­ing arm of Sun­ing, PPLive Sports In­ter­na­tional, re­sponded on an of­fi­cial so­cial me­dia ac­count by blam­ing the Covid-19 cri­sis for the im­passe.

Con­firm­ing it had at­tempted to rene­go­ti­ate its deal, it said: “Covid-19 has brought many chal­lenges, and it’s es­pe­cially ob­vi­ous dur­ing broad­cast­ing rights ne­go­ti­a­tions. Af­ter rounds of meet­ings, PPLive Sports and the Premier League have a dis­agree­ment on the price of broad­cast­ing rights. We re­gret we couldn’t have an agree­ment with the Premier League.”

That in­cluded at­tempts by the com­pany to se­cure a three-year ex­ten­sion to its con­tract to cover the 2022 to 2025 sea­sons at a more ad­van­ta­geous price.

Premier League clubs had con­sid­ered ne­go­ti­at­ing a new pay­ment plan with Sun­ing or ter­mi­nat­ing the deal last month, be­fore vot­ing for the lat­ter course at yes­ter­day’s meet­ing.

Sun­ing bought the rights to the pre­vi­ous three-year cy­cle in Novem­ber 2016, months af­ter se­cur­ing a ma­jor­ity stake in In­ter Mi­lan that it still holds.

It did so at the peak of Chi­nese in­ter­est in in­ter­na­tional football, with the Premier League man­ag­ing to se­cure a 12-fold in­crease on its pre­vi­ous con­tract in the re­gion with Su­per Sports Me­dia.

But Sun­ing’s abil­ity to fund the deal was called into ques­tion even be­fore the pan­demic, af­ter it laid off a large num­ber of staff last year fol­low­ing a pe­riod in which it spent heav­ily on rights agree­ments, in­clud­ing those of Europe’s other ma­jor leagues, La Liga, the Bun­desliga

and Serie A. The ter­mi­na­tion of its Premier League con­tract has also taken place against a back­drop of po­lit­i­cal ten­sion between Bri­tain and China, in­clud­ing over the fu­ture of Hong Kong. The Prime Min­is­ter’s de­ci­sion to block Chi­nese gi­ant Huawei’s in­volve­ment in the UK’s new 5G net­work over se­cu­rity con­cerns also soured re­la­tions.

The Premier League found it­self at the cen­tre of a diplo­matic row with China last year af­ter Me­sut Ozil spoke out on In­sta­gram against al­leged hu­man rights abuses in­flicted on the coun­try’s Mus­lim Uighur pop­u­la­tion in Xin­jiang.

And this sum­mer, Chi­nese state broad­caster CCTV Sports – al­lowed by Sun­ing to show some matches – caused a stir by switch­ing its cov­er­age of Liver­pool’s 5-3 win over Chelsea to a mi­nor dig­i­tal chan­nel.

It re­mained to be seen last night whether CCTV or an­other broad­caster would be will­ing or able to step into the void left by Sun­ing and, if so, how much they would be pre­pared to pay at a time of global fi­nan­cial tur­moil.

Kieran Maguire, a football fi­nance ex­pert and lec­turer in the sub­ject at the Univer­sity of Liver­pool, said: “It will be a chal­lenge for the Premier League, be­cause if you’re deal­ing with a Chi­nese com­pany, nor­mally it is linked di­rectly or in­di­rectly to some form of gov­ern­ment ap­proval. If the with­drawal of pay­ment by the present broad­caster was ap­proved by cen­tral gov­ern­ment then it’s dif­fi­cult to see how the Premier League is go­ing to ne­go­ti­ate with a new broad­cast part­ner in China.”

It also re­mained to be seen whether the ter­mi­na­tion of the Sun­ing deal would end up in court.

Maguire warned that the Premier League could strug­gle to find a ma­jor le­gal firm pre­pared to take on a Chi­nese con­glom­er­ate if that meant risk­ing “up­set­ting” clients based in the coun­try.

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