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Friday, 5 July, 2002, 14:25 GMT 15:25 UK
Sky's lifeline to struggling clubs


This new £95m deal will not give league clubs anything near the income the ITV Digital deal promised but it will offer a lifeline to those hardest hit.

It will also make sponsorship of teams and advertising at their grounds a more attractive prospect now that their matches could be shown to a large TV audience.


Sky had a very strong bargaining position

Sky Sports channels have many more subscribers than ITV Sport did before ITV Digital's collapse.

BSkyB's £95m over four years is probably a more realistic valuation of the broadcasting rights than the £315m for three years negotiated by ITV Digital.

Too much

It is less generous than the £125m Sky paid the League for five year's broadcasting rights in 1995.

Sky had a very strong bargaining position however, after the collapse of ITV Digital had left the League with no broadcasting partner.


The income gap between Premiership clubs and those in lower divisions will increase even further

It is widely accepted that ITV Digital paid far too much for three year's rights in 2000.

Their mistake was made at a time when optimism was high for both ITV Digital and the future of sport on TV, leading to strong competition amongst broadcasters.

League matches, which tend to attract a more localised following than their premiership counterparts, simply failed to draw in the audience required to make the deal worthwhile.

A turning point?

David Burns, the chief executive of the Football League, said the deal should save league clubs from financial ruin, although some will still struggle to make ends meet.

The down-side of the deal is that the income gap between Premiership clubs and those in lower divisions will increase even further, making it even harder for League clubs to compete with the elite teams.

In 2001, the Premiership negotiated a three-year broadcast deal with BSkyB worth £720m.

Some would argue that this latest deal marks a turning point in sports broadcasting, however.

Commercial television providers¿ finances suffered from a major advertising downturn in the wake of 11 September.

The collapse of ITV Digital also means there are now fewer organisations competing for sports broadcasting rights.

The days of ever-increasing broadcast contracts might be coming to an end, not just for the Football League.

See also:

05 Jul 02 | Business
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