The final bids for the rights to broadcast Serie A from 2021 to the summer of 2024 have been sealed shut, mailed in and are now being chewed over by the 20 league chiefs in Milan. Among them is Roma’s CEO Guido Fienga, who travelled to the financial capital of the North this morning to discuss what Serie A’s options are for the three seasons after next.
We’ve been here before, so let’s be brief in painting the background of conflict that so often deadlocks the Italian game from becoming more competitive on the European scene. Perhaps the best example of anti-trust pervading the Italian domestic game is Roma’s complaint, just two weeks ago (via ForzaRoma), to the FIGC about the bonuses Serie A’s CEO Luigi De Servio would earn for pulling off the next three-year TV deal.
If Milano Finanza is to be believed, then De Servio earns a fixed €800,000 salary a year, plus up to €160,000 in performances bonuses each year. Most crucially of all, De Servio stands to earn a 1% cut of any increase in Serie A’s three-year TV income over the expiring 2018-2021 package.
Nothing out of the ordinary so far; if you bring home a bigger deal for all 20 clubs, then you get paid for it. That’s just good incentive.
But Roma’s beef with De Servio’s pay is that his performance bonus was added in at the FIGC’s discretion, without even so much as consulting Serie A’s 20 clubs over how, when and where De Servio should be paid for his performance. Why would the FIGC want to get involved at all?
It doesn’t necessarily make sense, and only feeds the feeling that the Italian business of football is being held back by a culture of patrimony, where Sky Mediaset chiefs keep exploiting a “you scratch our back, we scratch yours” relationship with the FIGC, at the expense of Italy’s top-flight league getting fair-market value for its product.
This is the same public-private patrimony rife from within Italy’s municipalities, holding back Italian clubs from owning their own stadia and being their own landlords. The names are different when it comes to TV money, but the rent-seeking culture remains.
Last time around, back in 2017, we were worried that Sky and Mediaset were deliberately holding onto a noncompetitive monopoly in Italy’s domestic market—a fear made worse by the fact that Sky bought out Mediaset through the latter’s financial troubles.
No longer could Serie A rely on the two media names pushing one another to new levels at auction, as their were now officially on the same team (if they weren’t already before the merger).
Now the fears are worse, as the Sky-Mediaset-FIGC unofficial monopoly is effectively siphoning money from the league’s private deals, through De Servio’s pay-packet. At least, that is the implication from the league’s biggest clubs, through Roma’s letter of complaint this past month.
Patrimonial behavior is hard to prove on paper but, no matter what you choose to believe, the fact is that Serie A’s 2018-2021 €1.1 billion TV deal was underwhelming for everyone involved. It may have delivered an €11 million increase in yearly revenue for Roma at the time, but that couldn’t keep up with the increase in expenses to compete on the European scene.
Since the football business has been put on steroids from the likes of Manchester City and PSG, particularly in 2017, the cost of putting together a competitive football team is running away from Serie A clubs. That’s also been compounded by Italian football’s history of giving record-levels of club income away to player wages alone, even back in the heyday of Italian football from the eighties to the new millennium.
Back then it seemed worth it to give away 80% of clubs’ money to players, as we watched blockbuster signing after signing arrive to the peninsula. Football debates could be settled easily; if you tuned into Serie A you’d be watching the likes of Batistuta, Crespo, Matthaus, Maradona. Not to mention the ostentatious fashion from the likes of Arrigo Sacchi’s sunglasses. Cool points were abound.
Now football’s true inventors flock to England’s Premier League, and it’s massive 6.4 billion pound 4-year domestic TV deal. Weekly Premier League match previews are about whether Pep Guardiola can outwit Jurgen Klopp, while Serie A wonders pillories the latest Juventus coach Sarri - he who tried to make his cigarette smoking famous on the PL benches at Chelsea - for “only” winning their 9th straight league title with just a single-figure points victory.
Premier League clubs are largely unwilling to take a risk on Serie A’s best exports unless they’re young and not yet indoctrinated by the Italian game, yet ex-Premier League veterans like Lukaku, Mkhitaryan, Eriksen, Smalling, Kolarov and Dzeko easily set the standard when it comes to Serie A performance. Italy’s two biggest clubs, Juventus and Inter, place their fate in a couple of coaches who got fired at Chelsea, while AS Roma’s Paulo Fonseca openly speaks on his dream to one day coach in England.
Who could doubt that Serie A is, at best, the fourth-most competitive league in world football at the moment? By next summer, we’ll likely be talking about a decade’s worth of uninterrupted Juventus success at the top.
Let’s say that again: A decade of Juventus titles.
Ma sta roba nel quale vince sempre la stessa, per evidenti vantaggi economici, è divertente?— Callaghan (@danielelozzi) July 30, 2020
Una Lega privata con ridistribuzione equa delle risorse (e quindi delle possibilità di vittoria) non sarebbe più divertente?
La mia è una domanda seria... pic.twitter.com/5hkEwb57BQ
Surely, something has to change.
Now Serie A’s chiefs are back at that crossroads we first explored back in 2017: Do they continue to offset the risk of broadcasting football to the same old media companies, or is it finally time to roll the dice in taking on the responsibility of growing the game in-house?
That’s exactly the question being chewed over this week, in talks that won’t conclude until the 24th of August. That’s when Serie A is expected to announce the winning bid, from a threefold of strategic options:
Option A: Leave Serie A’s Future in the Same Old Hands
I don’t know whether the Italian media just likes Claudio Lotito as the pantomime villain of Italian football, but Calcio e Finanza reports that the most stagnant option is favored, once again, by Lotito himself.
This would be going with the standard auction format, where the most preferred bid is selected from a broadcaster who assumes full-risk of televising matches, at no risk to the clubs. As we’ve seen time and time again in years gone by, that broadcaster often ends up just being Sky Mediaset in one guise or another—with Rai often coming in to collect the radio and other media rights for a small sum on top.
It’s said that Lotito is pushing for assurances from the traditional broadcasters that their total bid is a minimum of €1.2 to €1.45 billion over three years. But we saw how little those “assurances” were worth in 2017, when the league’s aim was to deliver a minimum 1.2 billion-euro deal and instead was met with a derisory opening bid of €645 million from Sky.
In the end, the league had to settle for €1.1 billion over three years, for the sake of everyone saving face. Clearly Sky Italia feel they know more about the league’s business than it does, itself. So why keep going to their door?
Don’t be surprised if this is the winning option by August 24th, but it’d effectively spell the continued decline of Italian football, perhaps even being overtaken by the French league by the time 2024 comes around.
Option B: Get An Independent Third-Party to Manage and Broadcast
It would involve giving the rights to a private broadcaster, who would setup an independent company to both broadcast and manage the growth of domestic and overseas TV deals. That newco would get a 15% interest in the Italian game as compensation for running business in a detached manner, and growing the game beyond the “old boys club” that has held Serie A business back for decades. The 85% controlling interest would be split among Serie A’s 20 top-flight clubs.
Among the current bidders said to be open to this project are three private funds: Bain Capital, Advent Capital and CVC Capital Partners. Formula 1 fans may recognise the last name as the people who owned F1 from the exciting days of the 90s to the bore-fest it became in the new millenium.
Option C: Full Risk, Everything In-House
The third way is the riskiest of all, first championed by Torino owner Urbano Cairo, back in the mid-2010s, and what was meant to be the original winning bid from Spanish renegade broadcaster Mediapro for the 2018-2021 package.
But, to no one’s surprise, Sky Italia managed to get Mediapro’s bid overturned by Italian courts and belately took over the deal themselves. Nonetheless, this idea is still favoured by outspoken Napoli owner Aurelio De Laurentiis today even if Cairo has abandoned it: it’s the dream of Serie A owning it’s own TV network, direct-to-viewer, WWE Network-style.
De Laurentiis may be off-the-cuff, but let’s just remember he’s the son of a cinematic dynasty that took the risk of turning Frank Herbert’s Dune into a film for worldwide-release (the 1984 version, not the re-release coming later this year). Anyone, both now and then, could tell you that’s both the best and worst idea anybody could ever commit to paper, let alone to their bank account. Yet ADL comes from a family that has the guts to take that kind of gamble.
Serie A clubs would be assume full responsibility for any losses, if their network fails to catch fire like De Laurentiis’ business plan (which he insists is conservative) assumes.
The bottom line here is: Serie A fans would be asked to cough up €29.99 a month, for the right to watch all Serie A games lives, direct to your computer, tablet or television with no films, news networks or any other kind of entertainment packages - things that ADL claims “fans don’t need or want” - thrown in from your friendly, neighbourhood Serie A broadcaster.
Just the Italian football. No more and no less. No having to sign up to multiple TV packages either. It would all come in one package.
De Laurentiis estimates that, if Serie A clubs get this plan right, it would be worth an initial €2.5 billion for Serie A TV’s “Year Zero” and grow to just under €3 billion per-season in five years’ time. Less chance of having to wave goodbye to Mohamed Salah or Alisson to the Premier League then.
But when you’re already shelling out ten dollars on Spotify a month, and even more on Netflix or Amazon Prime, do you really love Serie A enough to stack another 30 bucks of monthly expenses on top?
Let us know in your CdT poll below.
Would you pay €29.99 a month to watch every single Serie A TV game live, direct to your tablet, PC and television?
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