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Candy Crush Backer Fights to Get Better Deal for English Soccer

  • Derby owner says clubs below top tier can boost rights revenue
  • League should split rights for pay TV, free TV, web: Morris

Each year, England’s top 20 soccer teams share 1.7 billion pounds ($2.2 billion) in domestic broadcast revenue -- a windfall that’s enabled them to set records for player transfers while investing in arenas and training facilities and limiting increases in ticket prices.

The 72 teams just below the English Premier League –- the Championship League, the First Division, and the Second Division –- share just 88 million pounds a year, and as of April, four of the clubs were struggling to stay solvent, according to financial-services group Begbies Traynor.

The English Football League, as those three tiers are collectively known, needs more money, and Derby County Chairman Mel Morris says he’s got a way to get it. An internet entrepreneur who made millions with investments in Candy Crush Saga maker King Digital Entertainment Plc and uDate, Morris is lobbying other club owners and executives to rethink the league’s media strategy, even as it enters late negotiations to renew its current three-to-five year deal with Sky Plc and Channel Five.

He points out that the EFL, with teams like Leeds United, Derby, and former European champions Aston Villa and Nottingham Forest, has plenty of fans, with a TV audience about one-third as big the Premier League. Even so, Sky paid the Premier League about 11.1 million pounds per broadcast match -- nearly 20 times more than what the EFL received.

If instead of selling all of its broadcast rights to one company, the league divided them between pay TV, free TV and online media, Morris says the league could get as much as 300 million pounds a year -- considerably more than the 180 million pounds the EFL is said to be close to agreeing to, according to reports in the Guardian and the Daily Mail. More outlets and platforms could also result in more exposure for the league: last year Sky aired fewer than 10 percent of all EFL games.

“To lock up the U.K. rights to all EFL games, for three seasons, with a contract that only envisaged monetizing nine percent of the games was, and is, commercial suicide,” Morris wrote in a proposal to the league’s other owners and executives.

Derby County says many other clubs in the league support restructuring the rights, but the ultimate decision will be decided by the league’s Chief Executive Officer Shaun Harvey and its board. Derby County’s finance chief is an alternate director.

“The EFL will not be making any comment on the sale of its domestic broadcasting rights until the tender process has been completed and the required approvals have been secured. There is no timetable or deadline in place to complete this," the EFL said in an emailed statement. Consulting group Oliver & Ohlbaum, which advises the league on media strategy, declined to comment because the process was ongoing.

Sky, which has reorganized its sports offering to include two entire channels devoted to soccer, declined to comment.

“There’s pressure on Sky to retain as many football rights as it can because it has not focused so much on other areas like tennis, for example," said Julian Aquilina, a television analyst at Enders Analysis. “Even though EFL does not have the same draw as the Premier League, there are plenty of people who live in towns without a Premier League club who want their team to do well and would be avid Sky subscribers.”

Whatever the deal, it will be larger than the EFL’s previous agreement and media analysts will be looking at what follow-through there might be for the next Premier League contract which starts being negotiated shortly. Earlier this summer, Sky rival BT Group Plc was told the EFL was looking for at least 160 million pounds a year -- about 10 percent of the Premier League’s 1.7 billion-pound deal, according to a person familiar with the situation.

“The EFL must step up massively in achieving value from the U.K. and international media rights,” Morris said. “If they do not, then the very future of the EFL will be in jeopardy.”

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