TV, once soccer's saviour, overshadows new season
Philippa Moreton
Football's new season is kicking off across Europe but turmoil over television contracts - the engine of soccer's growth for a decade - threatens the sport's financial future.
Italy's Serie A voted to delay the start of its season on Tuesday after almost half of the top flight clubs were unable to agree terms with satellite broadcasters over television rights.
Italian soccer was already reeling from the fate of Fiorentina, once a leading force in domestic and European competition, which collapsed last month under its debts.
Fears that other clubs might follow suit would be fuelled by pared-down television deals in a big-spending league famous for its huge salaries.
England's Football League resolved some of the problems created by ITV Digital's collapse before its season started two weeks ago, and first, second and third division matches can now be viewed on satellite channel Sky, alongside premier league games, following a cut-price deal.
Germany's Bundesliga is suffering the after-effects of media giant Kirch's downfall. A renegotiated television deal has left many clubs struggling to cover their costs.
SURVIVAL INSTINCT
The current problems could force a shake-up among Europe's football leagues as clubs seek other sources of funding. Future television deals are unlikely to match the lucrative contracts signed at the end of the 20th century.
"Every business has good and bad years. The difference here is the TV income is a very big component of their overall revenue," PricewaterhouseCoopers economist David Lancefield told Reuters.
"But you would expect them to be able to hold out."
Kirch paid 1.5 billion euros ($1.48 billion) for rights to screen top flight German matches in a four-year deal due to end in 2004, but amassed huge debts after being unable to make money out of its investment.
ITV Digital had agreed to pay the English Football League 315 million pounds ($481.2 million). But it collapsed with two years remaining on its contract, leaving the 72 clubs outside the premier league with a shortfall of almost 200 million.
The League agreed a 95 million-pound four-year deal with Sky but clubs are having to take drastic measures - including sacking players and delaying rebuilding projects - to address their income shortfall.
Spain's first division, excluding Real Madrid and Barcelona who have their own rights deals, is in the process of negotiating a television deal to run from 2003, which could net up to $300 million a season, according to media reports.
Due to the continent-wide uncertainty, Spanish clubs have been cautious in their transfer dealings although Real are reported to be about to buy Brazil's Ronaldo from Inter Milan to add to Luis Figo and Zinedine Zidane - the world's two most expensive players.
France's first division will soon begin talks over the renewal of its rights contract, currently shared between Vivendi Universal's Canal Plus and digital satellite service TPS, which runs until June 2004.
France's soccer authorities, acutely aware of the delicate financial climate, meet this week to decide whether to bring in experts to help with their negotiations.
"When deals are renegotiated...there might be some questions on either side of the fence as to whether they could do better," Lancefield said.
"There will be more of a focus on getting a good deal rather than a deluge of clubs going under."
WAGE CUTS
Across Europe, clubs unable to get out of expensive and lengthy player contracts have resorted to cutting squads by not renewing deals. Bonus schemes have been reviewed and some clubs are introducing performance-related pay packages.
Top footballers including Zidane, the world's most expensive player, and Inter Milan's Ronaldo, Christian Vieri and Alvaro Recoba, have said they would be prepared to accept a wage cut to help soccer through the crisis.
At the other end of the scale, in the English first division, Nicky Summerbee and Billy McKinlay have agreed to play for Leicester City for free in order to get games, rather than wait for a club to offer a contract that might never arrive.
The English premier league is not immune to football's woes despite its status as the richest league in the world with the world's richest club, Manchester United.
England's top flight has been buoyed by a 1.1 billion pound ($1.68 billion) contract with Sky, which runs until 2004.
But it is unlikely the premier league will receive the same amount when the rights are re-negotiated, due to reduced competition from other broadcasters, a fall in advertising revenues and a more realistic assessment of the value of football content.
