There has been a lot of discussion recently about how Sky would walk away if RFC are demoted to SFL 3, but no facts to back up the statements. In this post I will use official viewing figures of SPL matches during season 2010-11 pre split to demonstrate that financial losses to clubs outwith Rangers and Celtic may not be as drastic as is being reported.
All figures below relate to season 2010-11 pre split.
The 3 OF games are 33% of the SPL’s total viewing figures.
Sky add approx. 100% to viewing figures for their matches (ex. OF games). This is the average viewing figure for matches including RFC & CFC. This figure varies when looking at individual matches however it is broadly correct, therefore a claim that Sky have better matches than ESPN cannot be made.
Matches involving non OF teams have an average viewing figure of 43% (Sky) and 41% (ESPN) of the average game involving either Rangers or Celtic. This figure is also massively skewed by a St Mirren v Hibs match immediately following an OF game, which had double the audience of the next highest non OF participating game.
There are more figures and stats available (links to my spreadsheets and the source of viewing figures below) however it is apparent that if you remove the 3 OF games Sky would have a legitimate case to reduce the new SPL TV deal (£80m over 5 years, between Sky and ESPN) by 33%, possibly more due to the increase in costs of televising 37 matches as opposed to 3.
We then lose a further 27% (of the remaining 67%, which is generous) due to no RFC matches being broadcast. Therefor the total reduction in viewing figures, by removing Rangers and assuming the people that watch Rangers matches do not watch any other games, is 49%.
There does not appear to be a correlation between success of non OF teams and increased viewing figures, however, Motherwell v Hearts achieved the highest viewing figures for a game not involving either of the OF and they both finished in the top 6 that year, Hearts 3rd.
It could therefore be argued that clubs with larger fan bases, Ie. Hearts, Hibs and Aberdeen, success could bring a rise in viewing figures.
My conclusion, based solely on viewing figure, is if RFC are relegated, Sky/ESPN WILL slash our TV deal by 50%, minimum. I wouldn’t be surprised if Sky walked away and left it all up to ESPN who now have a shortfall of British football, after losing EPL rights. This would have a damaging effect to all clubs sponsors due to the probable 50% reduction in viewing figures from being on ESPN. It would however be good for armchair fans who would only have to shell out £11 a month for all SPL matches.
Further, I note that Sky/ESPN use SPL football as a filler for their EPL football and they may not be overly concerned with a drop in viewing figures caused by no RFC matches, however it would be naive to belive that they would not use the above statistics to negotiate a drop in price.
Below is the existing (estimated) prize funds for the SPL this year. The total pot consists of £13m from TV revenue by Sky/ESPN, and £3m from other sources (BBC highlights, radio, foreign TV, sponsorship etc)
The second column contains the estimated prize total with a reduction in the £80m over 5 years deal to £40m. With £3m a year added as above. (figures rounded to nearest £10k)
1st £2.72m £1.87m
2nd £2.40m £1.65m
3rd £1.52m £1.05m
4th £1.36m £0.94m
5th £1.28m £0.88m
6th £1.20m £0.83m
7th £1.12m £0.77m
8th £1.04m £0.71m
9th £0.96m £0.66m
10th £0.88m £0.60m
11th £0.80m £0.55m
12th £0.72m £0.49m
Loses in revenue ranger from just over £200 for finishing 12th to almost £900k for finishing 1st. The major losses are weighted heavily at the top of the table Ie.1st and 2nd places.
Redistribution of Wealth
The points above paint a pretty bleak picture not just for Celtic, who presumably would finish 1st, but also the rest of the teams who would have to swallow a minimum £200k a year. However if Rangers were to be expelled from the SPL it is assumed that the remaining clubs, bar Celtic, would vote to redistribute the prize money for the SPL from the current system which gives a large proportion to the teams finishing 1st and 2nd. I have estimated the likely redistribution of prize money (linked below) with a reduced TV deal.
This creates an even bleaker picture for Celtic. However if Rangers are removed from the SPL every team will finish 1 place higher than they normally would, except Celtic obviously. The second column below is the loss in prize money from the current season, with a reduced TV deal, with redistributed prize money (as per column 1) but also taking into account the fact that each team would finish 1 place higher. Ie. Motherwell this year finished 3rd being awarded £1.52m if Rangers were not in the league Motherwell may finish 2nd and would be awarded £1.42m, a loss of only £100k.
1st £1.60m N/A
2nd £1.42m £0.10m
3rd £1.26m £0.10m
4th £1.09m £0.19m
5th £0.99m £0.22m
6th £0.87m £0.25m
7th £0.77m £0.28m
8th £0.71m £0.25m
9th £0.65m £0.23m
10th £0.60m £0.20m
11th £0.55m £0.18m
12th £0.49m £0.49m Gain
The maximum any club would lose would be £280k for the club finishing 7th. The biggest winner would be the team in 12th who would have been in the 1st Division. Celtic would be far in the way worst off with a reduction in prize money of £1.2m.
The new TV deal would not take effect till 2013/2014 so the above would not come to fruition until year 2. In the mean time every club would have benefited from a £200k windfall due to an automatic increase in league position for the season 2012/2013, without Rangers. This completely negates the loss that would be felt be almost all clubs for the following season. With only 4 clubs standing to lose between £50k and £80k over the two seasons. The big reduction would come in year 3, when all clubs would be even for the 3 years or in a losing position to the tune of up to £360k (1 club only).
After this 3 year period it is expected that Rangers would be back in the SPL and presumably, Sky/ESPN would increase the amount on offer to near what we have at the moment.
Therefore the thought that Rangers leaving the SPL would decimate Scottish football is a fallacy. A handful of teams would lose in the region of £200k to £300k over 3 years, the rest bar Celtic would near enough break even.
None of this takes account of the revival that would be seen in Scottish football if the main contender for the championship saw their budget for the season slashed by over £1m. This would make an enormous difference to the ability of other clubs to compete with Celtic week in week out. I would still not expect another team to win the league, but it would be a closer affair than at the moment.
Rangers being expelled to the 3rd division is not only, not bad for Scottish football, it appears it will be a boon! The only people who will benefit from RFC playing in the SPL over the next 3 years are Rangers and Celtic, just like the last 15 years.
Note: The spreadsheet is not the sexiest I have ever produced, it is not terribly clear but is provided so numbers can be verified.