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Paul Pogba (R) of Manchester United fights for the ball with Tanguy Ndombele (L) of Tottenham during … [+]
The Premier League has taken unprecedented steps and canceled the remaining two years of its China broadcast deal with PPTV, a company owned by conglomerate Suning Holdings Group.
The deal, for the 3-season cycle from 2019/20 to 2021/22, was announced with great fanfare in the first season of the previous 3-year cycle, something that was highly unusual. The deal with PPTV was to pay the Premier League $ 750 million, with an initial payment of $ 350 million.
Another payment of $ 210 million was due in the spring of this year, but no money was received, hence the decision by the Premier League to terminate the contract.
The contract with PPTV replaced a deal with Super Sport Media Group that paid just $ 80 million and limited the league’s exposure. SSMG retained almost 40% of its Premier League inventory to pay for viewing.
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The deals in two of the world’s largest markets, China and the United States, helped boost the Premier League’s overseas rights to $ 5.6 billion over three seasons and helped offset the weakening of the domestic market. The foreign market has become increasingly important for the Premier League. In 1992, when the Premier League was formed, the value of overseas rights was essentially zero.
Combined, the domestic and foreign deals for 2019/20 to 2021/22 concluded with the Premier League banked for more than $ 12 billion, until the last problem.
Taken in isolation, a $ 200 million reduction for the next two seasons from a base of $ 4 billion per season doesn’t seem like a major loss – an average of about $ 10 million per team. However, it comes at a time when the Premier League, like others, is faced with the loss of gate money and the added expense that spectators bring in going to matches.
If the Premier League terminated a deal in another country, it would act quickly to close the gap by selling to a competitor. But this is China, and politics weigh heavily when it comes to business. Earlier this year, the British government prevented Huawei from participating in the construction of a 5-G network. There is also China’s action in Hong Kong. If we add the two together, it seems unlikely that the Chinese government will give a quick green light to an English league looking for a replacement station.
The reaction of the other European leagues with agreements with PPTV will be mixed. On the one hand, the other leagues will see the absence of the Premier League as an opportunity: one less competitor to fight.
On the contrary, there will be nervousness and a level of uncertainty given PPTV’s decision not to fulfill its contract. If PPTV is willing to toughen up the Premier League, why not the others?
Suning Holdings
Antonio Conte, FC Internazionale coach (Photo by Emilio Andreoli / Getty Images)
The company was founded in 1996 and Forbes ranks it as 490 in its Global 2000 with annual sales close to $ 40 billion and a profitability of $ 1.4 billion.
The holding company operates four divisions: Suning.com; Suning Finance; Suning Real Estate; Sun sports. Suning Sports owns the broadcast rights through PPTV to other leagues, including La Liga, Serie A, Bundesliga and Ligue 1.
Suning Sports also owns three football clubs: Jiangsu Suning Football Club, Jiangsu Suning Ladies Football Club, and Serie A FC Internazionale Milano (Inter).
