Broadcasters or fans - who comes first?

Published on Friday 10th June, 2011 by Celtic Trust

Berti McIlkenny takes a look at the last few TV deals and asks 'is it worth it?'....

After Sunday’s match (the final day of the season against Motherwell), Neil Lennon and numerous players have publicly thanked the Celtic support for our backing this year. Despite the plaudits, the fixture list was again not kind to match-going Celtic fans this season. Indeed, not one of our last eight league matches this season were played on a Saturday, never mind at the traditional time of 3pm. The final derby of the season was even played on Easter Sunday, a time many fans would rather spend with their family or observing the holiest day in the Christian calendar than wrapped up in the tribalism of the Glasgow derby. 

The sentiments behind the Green Brigade’s ‘Balls to 6pm’ protest at Perth and ‘It’s time to put fans before TV’ banner at Hampden were shared by many in our support, prompting the Club to respond before the second midweek 6pm match at Inverness. In an article on the official site titled ‘Chief Executive: Fans Must Come First’, Peter Lawwell acknowledged that ‘our fans are the lifeblood of our club, and of Scottish football’, adding that ‘television is an important income generator in Scottish football, but the fans need to be considered more in order that we can achieve a balance’. These words got me thinking: how important is TV money to our club, and what could and should be a more appropriate balance?

I decided to do a little bit of research on the impact of TV on our matches and our finances over the past decade, and also look more broadly at the impact of TV on attendances across Scotland during this same period.

TV GAMES

I began by looking at TV’s role in the scheduling of our matches. In the ten full seasons from 2001/02 we have played 535 competitive matches. Of those, 421 have been SPL games (380) or Scottish Cup (41) ties, both of which are traditionally played on a Saturday at 3pm. The remainder are European games and League Cup ties.

Season

Games played

Games played – SPL & SC

Saturday 3pm kick-offs

2001/02

54

43

15

2002/03

60

41

11

2003/04

61

43

13

2004/05

51

43

14

2005/06

45

39

12

2006/07

53

43

13

2007/08

54

42

12

2008/09

51

41

14

2009/10

54

42

13

2010/11

52

44

12

Overall

535

421

129

 

In those ten years we have played just 129 matches on a Saturday at 3pm – that’s less than a quarter of all our matches, and 30.6% of all SPL and Scottish Cup games.

 

 

A mere 9 of these matches have been played away from home – though this itself is quite surprising seeing as it is over 2000 days and 121 away league and Scottish cup matches since we last played on a Saturday at 3pm. That game - a resounding 5-0 win away at Livingston - seems a long time ago; the starting line-up was Boruc, Telfer, Camara, McManus, Balde, Nakamura, Petrov, Sutton, Zurawski, Beattie and a 22 year-old Shaun Maloney. The 9,115 paying punters also saw cameo appearances off the bench from Didier Agathe and John Hartson.

At the second fixture at Almondvale that season, played on a Sunday in late March, the attendance dropped to 7,486 despite the fact that we were just two wins from clinching the championship. Our other Saturday away 3 o’clock matches over the past decade all came in earlier seasons - 2 in 2004/5 (at Motherwell and Kilmarnock), 3 in 2002/3 (Aberdeen, Hearts and Dunfermline) and 3 in 2001/02 (Livingston, St Johnstone and Hearts). The table below compares the attendances for our Saturday 3 o’clock matches (‘traditional’) with these clubs, and our other game against them that season (‘non-traditional’).

Season

Opponent

‘Traditional’

Non-traditional

Difference

05/06

Livingston

9115

7486

(1629)

04/05

Kilmarnock

10500

9723

(777)

04/05

Motherwell

10592

12944

2352

02/03

Aberdeen

17824

16331

(1493)

02/03

Dundee

9483

9013

(470)

02/03

Dunfermline

9189

8913

(276)

01/02

Livingston

10024

8437

(1587)

01/02

St Johnstone

9041

n/a*

n/a

01/02

Hearts

15570

 

 

As you can see, in seven of the nine cases, attendances dropped when games were moved for television coverage. In only one case was the attendance at the televised match higher than the non-televised one – against Motherwell in 2004/5. This is however an artificial increase: the game in question was that horrible day at Fir Park when two late Scott McDonald goals snatched the league championship from our grasp. The crowd was swelled with expectant Celtic fans in the home end, hoping to see us lift the title. More accurately we could use our visits either side of the 2004/05 season for comparison: the late season clash in 2003/04, when 7749 attended the game, or the opening day match in 2005/06, which attracted 9903 fans. These would represent drops of 2843 and 689 respectively. Due to the SPL split we only played St Johnstone once in 2001/02, when they were also relegated. This does not therefore allow for any direct comparison, though the crowd was slightly higher that day than for our visits the previous season. The most recent match between the two sides at McDiarmid Park was played at 6pm on a Tuesday evening and drew a crowd of just 6338 - that is 2655 paying fans (approximately 30%) less than the last time we played on a Saturday at 3pm in Perth. 

This analysis clearly shows the detrimental impact TV coverage has on attendances at our matches. This is probably because televised coverage discourages fans from going, but also because matches are moved to inconvenient times. Since that sunny October’s day at Almondvale way back in 2005 we’ve played matches at 4pm on public holidays and lunchtime kick-offs in Inverness, but not one away match on a Saturday at 3pm. The recent trend is for matches to get earlier and earlier – gone are the regular Sunday 2 o’clock kick-offs of a few years back, replaced over the past couple of seasons by 12.00, 12.15, 12.30 and 12.45 kick-offs. Taking all this in I began to wonder how six continuous years of having away matches moved for television, especially when it clearly turns fans off going and frustrates those who do, represented any sort of balance at all. Surely there must be a massive wad of TV cash at the other side of the scales? After all, if TV dictates every last fixture detail and impacts so much on the lives of Celtic fans like you and I, it must surely be a huge contributor to our finances. There was only one way to find out so I buried my head in Celtic plc’s annual report, determined to find out what the balance of funding was.

 

THE BALANCE OF FUNDING

Celtic plc’s annual accounts are for the period 1 July-30 June, effectively covering a full season (i.e. the 2010 accounts will include all income and expenditure for the 2009/10 season). As the books for the current season have not yet been produced, my review of the past decade started with the 2002 annual report and carried through to the 2010 edition. The annual reports bands revenue into three broad categories: football operations, merchandising and multi-media.

Merchandising is self-explanatory – with every penny under this banner spent by supporters through the Club’s shops, in person and online. In 2010 this accounted for £15.5m of Celtic plc’s income, down from £17.18m in 2009. ‘Football operations’ is a little more complex, incorporating everything from gate receipts to transfer fees and prize money. It is though, mainly ticket sales – as confirmed in the ‘Chief Executive’s Review’ section of the annual report. In the 2009 and 2010 editions, Peter Lawwell notes ticket sales of around £29m, while the overall football operations revenues for these periods were £36.35m and £35.51m: gate money is clearly the biggest income generator. ‘Multimedia’ includes all TV income as well as earnings from the club’s own in-house media, like the Celtic View, Channel 67 and the official website. The reports do not provide a detailed breakdown of these multi-media operations but we do know multimedia incurred costs of over £1.9m in 2010. It is reasonable to presume that our in-house media at the very least breaks even, so it likely that it accounts for 20% or more of the income under this heading.

It is unclear what category some commercial revenues like sponsorship falls under, but even the strength of Celtic’s financial performance in this regard is based on the commercial benefits for sponsors of marketing products to our fans. Also bundled into the ‘multimedia’ category is the TV money associated with our participation in Europe. Our payments for playing in the Europa League in 2009/10 would also account for a significant chunk of this headline figure of £10.7m. The importance of European success to increasing multi-media revenue is shown by comparing the 2005/6 and 2006/7 seasons: in the first, you will no doubt remember, we were humbled out of Europe at the first hurdle by Artmedia Bratislava; in the second we took AC Milan to extra-time in the first knockout stage of the Champions League. The difference in multi-media revenue is huge: £11.89m compared to £23.2m. Clearly, when it comes to television revenue, Europe is a far more lucrative source of income than our own domestic market. Also under the multi-media heading is cash paid to the SPL for highlights and radio coverage, which are presumably not dependent on scheduling every one of our matches around English Premier League fixtures. It seems then, that the money Celtic plc receives from live domestic TV rights might not be that high – so exactly how much is it worth to the club, and how does this compare to the money that we directly put in?

The table below shows the split between football operations, merchandising and multimedia income throughout the nine years under review. Even at our peak in Europe, revenue raised directly from fans through gate receipts and merchandising far outweighs income from media sources.

 

Total

Football

 

 

Year

Revenue (£m)

& Stadium operations (£m)

Merchandise (£m)

Multimedia (£m)

2002

56.892

30.675

10.001

16.216

2003

60.569

33.513

11.456

15.6

2004

69.02

39.533

13.425

16.062

2005

62.168

35.504

10.06

16.604

2006

57.141

30.915

14.337

11.889

2007

75.237

38.671

13.367

23.199

2008

72.953

38.58

16.092

18.281

2009

72.587

36.534

17.18

18.873

2010

61.715

35.507

15.496

10.712

Note: Up until 2007, stadium operations were noted separately; from 2008 they were included with football. The 'other' I was talking about was, in fact, stadium operations - presumably functions, income from licensing the pie stalls etc.

 

THE TV DEALS

The SPL’s current rights deal for live coverage of SPL matches is widely reported to be worth £13m per season. Each club receives 4% of this sum, plus an additional payment based on final league positions – from 0.5% for bottom place to 13% for the champions. The runners-up receive an 11% performance-related payment. The SPL runners-up would therefore receive £1.95m, the winners £2.21m. Sadly we have only picked up the runners-up cheque for the past three years but Peter Lawwell was correct: an annual turn of £1.95m is undoubtedly an important income generator – maybe not enough to pay off failed previous managers, but a substantial sum nonetheless.

It however pales in significance when compared to the direct investment in our club by the fans. Indeed, we spend more on official Celtic merchandise than Sky and ESPN give to all SPL clubs combined! And to put it into further perspective, our ticket sales last year were approximately 15 times more than our income from TV companies for live coverage of our SPL matches. The TV deal accounted for just 3.16% of our turnover in 2010; a figure that would have shrunk even further had we enjoyed even reasonable success in the Europa League. We shall return to look at the impact of TV on Scottish football more broadly later, but before that I wondered if everyone else was like us. What of clubs with a similar turnover to us - how does their balance of funding tally up, and how does TV affect their fixtures and fans?

I didn’t have to look far. Just 195 miles from Celtic Park in fact, to a club that had managed to convince Owen Coyle to turn down a seat in our dugout for one in theirs: Bolton Wanderers. Our 2010 accounts showed a turnover of £61.7m, theirs an exact match. By strange coincidence, in 2009/10 they too had played 42 games that would traditionally be played on a Saturday at 3 o’clock (including 4 FA Cup ties, one a midweek replay). So how did we compare?  A quick look at their official website shows they played 23 league and 2 FA Cup ties on a Saturday at 3 o’clock. We, on the other hand played just 13. Given this difference, you might expect direct fan investment at Bolton to exceed our contribution to Celtic. Instead, ticket sales account for just £5.4m of their turnover, just under a sixth of what we contribute through the gate at £29m. Ignoring merchandise and other direct fan investment in the respective clubs (exact data is unavailable, but it is safe to assume we put far more in than Bolton fans do), the huge disparity in an investment and kick-off times being played at ‘our time’ is clear.

Their domestic TV deal netted them around £35m last year (£35.5m was reported in their accounts, though erring on the side of caution I’m deducting £500,000 for their one televised FA Cup match). In contrast, our entire multimedia operation brought in just £10.7m – and less than £2m of this from domestic rights to live TV matches. It’s fair to say that the balance of funding at the two clubs is wildly different - Bolton’s turnover based mainly on TV income and with very little fan investment; ours overwhelmingly raised from the fans with only minimal TV money. Yet despite this, it is our club that seems to live at the whims of the TV companies. You might reasonably argue that this is a bit of an aberration, one that serves only to highlight the pot of gold available at the end of the Premiership rainbow, and to some extent you would be right.

So if it is potentially unfair to compare ourselves to teams down south who else do we look to? Scratching my head, I decided to download a copy of this year’s authoritative annual Football Money League report, a study by the accountancy firm Deloitte, to see if I could find any answers. Drawing on the 2010 accounts of clubs across the world, Deloitte’s study found that we have the 10th highest match-day revenue of any football club. Or to put it another way, only nine other sets of fans in the world directly contribute more to their club’s coffers through gate receipts. Among the supports paying less out of their own pocket than us were fans of the 2010 European champions, Internazionale and their aristocratic city rivals, AC Milan. But it wasn’t just big clubs from the larger TV nations with lucrative TV deals below us. Benfica, Porto, Ajax and all the other famous names from the smaller European nations also look up at us from afar in the matchday income league table. Braga and Utrecht, our conquerors in Europe this year, are relative Sunday league amateurs in comparison. Deloitte noted that such impressive match-day income was because of our ‘phenomenal support’. When it came to TV income though, we were off the page. It seems that we are something of a unique and bizarre case: funded overwhelmingly by the fans but beholden to TV companies. If TV has had a disproportionate influence at our club, and a clearly negative impact on attendances, what has been its impact across Scottish football?

 

TV AND SCOTTISH FOOTBALL

It is beyond the scope of this article to look through the books of the other clubs in Scotland, but it is fair to say that television income will represent a higher proportion of their income than ours. That acknowledged, what has been the impact of increasing TV exposure on attendances across Scotland?

Let’s start by looking at the income generated by live TV matches. In the ten year period studied, there have been 5 television deals. These are detailed in the table below:

Season

Broadcaster

Annual value

Live matches

(1998/9-)2001/2

Sky

£11.25m

38

2002/3-2003/4

BBC

£6m

38

2004/5-2005/6

Setanta

£8.25m

38

2006/7-2008/9

Setanta

£13m

60

2009/10-

Sky/ESPN

£13m

60

 

The value of the SPL’s TV deal has remained constant from the summer of 2006 at £13m, partly as a result of the collapse of Setanta (allied with the seeming incompetence of the SPL). Any mathematician looking at the table will have already worked out that while total revenue has increased with each deal the return per match has fallen. The £13m received in each of the past five seasons for 60 live marches matches works out at £216,667 per match covered – a drop of almost 10% on the £236,842 of the previous contract.

So what has been the long-term effect on this increasing TV exposure on attendances across Scotland?  Looking at SPL average attendances across the period we see that they have nosedived – from 19,252 to 16,342 this season a drop of almost 3,000 fans per match. There was not however a flat-line drop: attendances dipped during the 2002/3 and 2003/4 seasons before rising again in the period after that (each of the next three years drew higher attendances than those two seasons).

 

Season

Average attendance

2001-02

16,043

2002-03

15,633

2003-04

15,204

2004-05

15,700

2005-06

16,162

2006-07

16,198

2007-08

15,229

2008-09

15,528

2009-10

13,926

2010-11

13,677

 

At the time this dip was rightly attributed by the SPL to the fact that the BBC held the rights to show live matches. As the free-to-air public broadcaster, they reasoned, a wider range of fans had access to live matches on TV and so were discouraged from going to the stadium. Sure enough, crowds rose when the rights were sold to digital channel Setanta the following season. Attendances peaked at a period high of 16198 in 2006/7 (the first year when TV covered 60 live matches – perhaps a short-term benefit of increased exposure), before dropping considerably the following season. Despite a brief rally back to 15528 in 2008/9 average attendances have slumped rapidly over the past two seasons. This is partly due to a collapse in attendances at our own club (and a smaller drop at Rangers) but the statistics show this trend is in evidence elsewhere. Of the 12 SPL member clubs in 2001/02, 9 remain in the top flight. Just 2 – the Edinburgh clubs, Hibs and Hearts – have seen attendances rise. The figures are shown in the table below, which paints a staggering picture of decline across the Scottish game.

 

Club

2001/02

2010/11

Difference

Aberdeen

14,035

9,129

(4,906)

Celtic

58,512

48,968

(9,544)

Dundee United

8,007

7,389

(618)

Hearts

12,080

14,185

2,105

Hibernian

11,588

11,756

168

Kilmarnock

7,621

6,427

(1,194)

Motherwell

5,879

5,255

(624)

Rangers

47,880

45,305

(2,575)

St Johnstone

4,581

3,841

(740)

Overall

170,183

152,255

(17,928)

 

It is impossible to fully explain the reason for these drops in attendances by figures alone, or to show the independent impact of TV - for a novice statistician like myself, anyway. Some may argue that declining standards on the park are at the root of the problem, but this would not explain how the 2001/2 SPL vintage of Henrik Larsson, Paul Lambert, Artur Numan and Ronald de Boer were watched by a lower (league-wide, anyway) average attendance than the peak year of 2006/7, when those bona fide stars had been replaced by Kenny Miller, Jiri Jarosik, Sasa Papac and Libor Sionko. There may be a number of factors at play, but it is however clear that increased TV exposure has had a major negative impact on attendances at matches. The SPL were right (something, at last!) when they argued that showing matches live on the BBC had a negative effect on match attendance. They must also then have realised that extending the number of TV matches from 38 to 60 would have a similar effect. After an initial spike, attendances have fallen – and over the past few years have fallen rapidly. It has arguably been this extension of televised coverage that has affected our fans more than any other change over the past decade, as every one of our away matches has been moved for TV coverage since the 2006 deal.

 

 

WHERE NEXT?

This overview of Celtic’s relationship with TV suggests that the balance Peter Lawwell supposedly seeks to achieve appears to be a long way from equilibrium. We put our hands in our pockets to financially support our team and have consistently been by far the largest and major source of our club’s income. In recent years our investment seems to be getting increasingly larger, yet our return (in terms of matches at fans favoured times at least) seems to be diminishing. Perhaps as a support we should begin to realise just how important our economic contribution is to the plc’s finances and the influence this gives us. A good starting point may be to exercise our collective voice – if not our wallet yet – and demand a fairer balance between the rights and wishes of fans and those of the broadcasters.

Looking beyond our club, there has been much said about the need to revitalise our national game. Last year, the SFA asked former First Minister Henry McLeish to produce a blueprint for the future, yet as far as I’m aware his terms of reference contained nothing about fans, our experiences or falling attendances. This seems rather strange given that our support alone puts far more into Scottish football than government, football authorities and TV companies combined. In a similar vein, SPL Chief Executive Neil Doncaster has recently spoken of his ‘first priority’ being to increase broadcasting revenue. He too, it seems, has forgotten about the paying punter. Perhaps he should think again; the short-termism of chasing the broadcasting buck will surely only further entrench the vicious cycle of decline: declining attendances, declining interest and ultimately, declining long-term income. He might do well to realise that sometimes less is more: football fans, it seems, simply do not want to spend their Sunday lunchtimes (or Tuesday teatimes, for that matter) at the likes of New Douglas and McDiarmid Parks. And smaller, less enthusiastic crowds make for a much inferior ‘product’ for TV. At this critical juncture for Scottish football, Peter Lawwell, Neil Doncaster and others running our club(s) and game should be opening up the debate about football, fans and TV rather than blindly chasing the next quick buck.  Lawwell appears to recognise our support as the lifeblood of the club and Scottish football – maybe next time he and his counterparts throughout Scotland get together to discuss future television contracts they should remember that, before we turn off for good.

 

 

 

 
 

Share this article:

Share with email
0 comments

Login to post a comment

 
 
Site by MALO MEDIA