TOP OF THE LEAGUE

He presides over the richest football league in the world, but how does English Premiership CEO Richard Scudamore plan to stay ahead of the game in the coming season?

IF YOU WERE TO DRAW UP A LIST OF THE MOST INFLUENTIAL FIGURES IN world sport, the name of Richard Scudamore would have to feature highly. As chief executive of the English Premiership, he oversees the wealthiest league in the world’s most popular sport, and demand is growing. Even in the middle of a global recession, the appetite for Premiership football across the world shows no sign of slowing down, and, in fact, is growing rapidly year on year.

A lawyer by training and a marketing man in his early career, Scudamore became chief executive of the Premier League 10 years ago after a two-year spell running the Football League (the lower leagues of English football). The period since he took over has been one of unparalleled success, with the Premier League enjoying record levels of income in the domestic market and rapid growth overseas, its tentacles now stretching into more than 200 countries worldwide. This reach has brought huge levels of investment from overseas, with half of the league’s clubs now having foreign owners or major foreign investors, not to mention foreign players, coaches and fans.

But Scudamore’s decade in charge hasn’t all been plain sailing, with many criticising the amount of foreign involvement in the English league and comparing it unfavourably to other competitions, such as Spain’s La Liga, which is renowned for the quality of its football. And as the recession took hold mid-way through last season, the league attracted controversy over the levels of debt being incurred by huge clubs, for example Manchester United, Liverpool, Chelsea and Arsenal.

Even more controversial was the plan for each side to play an extra game at an exotic location worldwide. The so-called ‘39th game’ was proposed as a way of appealing to even more potential Premiership fans in even more countries around the world. Reaction was swift and negative from most fans and pundits, and the idea was shelved.

But the majority of the club chairmen who make up the Premier League’s shareholders are still in favour of some form of expansion, and Scudamore’s brief is to find a workable solution, though he admits that it’s on the back burner for the time being.

Catching up with Richard Scudamore on the eve of the 2009/10 season, the obvious first question regards the financial health of the Premier League. The recession is still dominating the news agenda and shows no sign of abating, but what sort of state are England’s top football clubs in?

“The Premier League, as an entity, is always in sound financial health,” says Scudamore. “Our cost base is low and the mechanisms for distributing revenue to our member clubs, and our external distributions to good causes, such as the Football League and the grass roots of the game, are all based on a percentage formula.”

So it’s no surprise that the man charged with ensuring the health and viability of the biggest football league in the world has a reassuring answer to hand. Scudamore is a charming man, always gracious and welcoming, but can be ruthless when it’s in the League’s interests. He wasted no time, for example, in negotiating a deal with US broadcaster ESPN, part of the Disney empire, after rival broadcaster Setanta went bust, so safeguarding the league’s domestic TV income. “Having secured the domestic rights with Sky, ESPN and the BBC until 2013, the clubs are in a position to plan for the future,” he says. “Their cost bases are relatively stable, with wages consistently running at about 60 per cent of revenue, but they can be flexible too.  

Players are on relatively short-term contracts and ticket prices can not only be fixed from season to season, but also from match to match.”

Underpinning the league with lucrative TV rights and encouraging a flexible approach to financial management, Scudamore is continuing with a formula that has helped make the league what it is today. So does he envisage any major changes to the way the league runs in the next three to five years?

“We operate all of our broadcasting and commercial contracts on a three-year cycle, so that’s as far as we ever look ahead,” he says. “Having said that, if the clubs continue to operate the virtuous circle model of investment then the quality of the competition will continue, fan interest will be maintained and revenues will continue to flow into the game.  

Our overseas revenue is now outstripping our domestic in terms of growth, and accounts for about 25 per cent of our total broadcast income. It’s got a way to go to catch up, but it’s not inconceivable.”

Such massive exposure around the world, especially in emerging economies, such as India and China, gives hope for sustained growth even in the current financial climate. But does that mean that the Premiership can consider itself recession proof?

Ever the diplomat and astute businessman, Scudamore hedges his bets. “I think any industry struggles to set out to ‘recession-proof’ itself, and football is no different,” he says. “What we do have the benefit of is the commitment that our broadcast partners have shown in us. That gives us, and our clubs, a degree of security that should take us beyond the economic downturn.

“What clubs have been particularly alive to is the economic pressures currently facing fans. The vast majority of clubs have frozen or reduced ticket prices, as well as offering innovative and flexible packages to suit fans’ needs. Our clubs are used to operating in this kind of environment and I am confident that the majority will ride through this period unscathed.”

But is the level of debt incurred by some clubs a major concern for the league as a whole? “Debt is a factor of income and not inherently a bad thing. The real question is whether the levels of debt carried by some Premier League clubs are sustainable. Given that the vast majority of debt is carried by our biggest and highest revenue-earning clubs, such as Manchester United, Liverpool, Chelsea and Arsenal, you would have to say that it is sustainable.

“You also have to take a more sophisticated and nuanced approach to the types of debt that are out there – stadia related, purchase related and soft loans. All are legitimate in their own way, but cannot be lumped together.”

Of course, many of these debt-laden clubs have foreign owners or investors, so does he believe the growing investment from overseas, particularly the Middle East, is good for the Premier League?

“We are in the fortunate position that the Premier League attracts interest from right across the globe – and a natural consequence of that interest is that people want to be part of what they see and that leads to investment,” explains Scudamore. “The sort of levels of inward investment we are currently enjoying would be lauded in any other industry – in my view it is good for the game and good for the British economy.”

But if Scudamore welcomes inward investment, he’s scathing about what he sees as the lack of UK Treasury support for sport and sports personalities. It is widely expected that top players will soon leave the country or will choose not to come in the first place because of the changes in higher rate income tax that were introduced in the last budget.

“The UK tax system has never really done British sport any favours, especially when you look at the tax breaks elite athletes get in Spain and France, for example. However, I am confident that the allure of playing in the best league in the world, in front of packed stadia, combined with our clubs’ economic strength, means we will still be able to more than hold our own in the current market for top footballing talent.”

The much-maligned 39th game was intended as a way to attract foreign fans and talent to the English game, but Scudamore has gone back to the drawing board for now.

“The international round was floated as a concept, an idea, for debate and discussion,” he says. “We haven’t been able to bottom out to our satisfaction some of the issues we identified with it as yet, and probably won’t be able to do so for some time. The idea of playing some form of Premier League football overseas has not gone away, but as to how and when we do it, that will need some very careful consideration.”

He certainly doesn’t seem in a hurry to work out exactly what this international round will involve, but then Scudamore is aware that the Premiership’s popularity has been won over many years, and doesn’t depend on one-off tours, gimmicks and initiatives.

“Over the past decade the Premier League has enjoyed phenomenal growth in terms of our overseas popularity,” he explains. “We’re now seen in 211 territories with a global home reach of around 600 million homes. The reason for this is the quality and competitiveness of Premier League football – making sure that remains the case is our main focus going forward. We shall always remain primarily an English football competition played in England – that is our strength.

“But having said that, we will look at events, such as the Barclays Asia Trophy, where we take three clubs abroad to compete against a local side in a mini tournament, to respond to our international fans’ desire to see as close as possible live Premier League action first hand.

“We will also continue to develop our international coaching and good causes programmes, such as Premier Skills, as we have a responsibility to help develop the game where we are popular.”

And while Richard Scudamore is happy to innovate to keep the league growing in strength, he stresses: “Contrary to popular belief I actually spend most of my time trying to keep things the same at the Premier League. That has been our strength over the past 10 years and will continue to be so over the next.”

WORDS BY GERRY COX, HAYTERS

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