Business - Football nets big TV deals to beat a recession

GENEVA: If one sport can survive the global financial crisis, it's the world's favorite game: football.


Yes, individual clubs will certainly suffer some losing sponsors or investors and perhaps players who become too pricey. But cash flowing into the top end of the market, from television deals and multinational backers, is unlikely to dry up.

If anything, top-level football is poised to become an even stronger TV draw in hard times when people want cheap entertainment.

Look at the numbers. The 2010 World Cup is already sold, and FIFA expects to bank US$3.2 billion before kickoff.

UEFA earned a net profit approaching US$400 million from this year's European Championship, and the Champions League will pull in US$1.115 billion this season.

Also, television deals for the 2009-12 Champions League seasons are already done in the main markets, where prices are reportedly up 10 percent, and rights to show the English Premier League, where huge revenues help explain overseas interest in clubs, will soon be sold for the 2010-13 seasons.

Industry experts believe the domestic deal for Britain will beat the current 3-year cost of US$2.94 billion paid by subscription broadcasters Sky and Setanta. Global television and new media rights will earn English league clubs another US$1.73 billion in that time.

Philipp Grothe has traded football media rights for two decades. Last week, his Swiss-based Kentaro agency struck a six-year deal with the U.S. Soccer Federation to distribute national team matches.

He believes that when money is tight, football is a reliable commodity.

``Only the big live events in sport, ie football, generate the mass audience,'' Grothe said in a telephone interview with The Associated Press. ``They are the ones delivering to sponsors and broadcasters the big audience numbers.''

The World Cup is one of the globe's most-watched sporting events, and FIFA claims the 2006 tournament in Germany had an accumulated television audience of 26.3 billion viewers on 376 different channels.

FIFA, which relies on the World Cup for 90 percent of its revenue, has budgeted to get US$3.2 billion from television and marketing rights to the 2010 tournament in South Africa.

``FIFA believes that this is a realistic forecast,'' FIFA spokesman Pekka Odriozola said in an e-mail. ``Certain contracts are secured with bank guarantees. All TV partners have fulfilled their contractual obligations.''

The Zurich-based body has six commercial partners for the World Cup. One, Coca-Cola, is signed until 2022. The Emirates airline paid US$195 million to sign through the 2014 tournament in Brazil.

UEFA, which declined to discuss marketing strategy, had turnover of roughly US$2 billion for the 2008 European Championship in Austria and Switzerland, but has not started selling Euro 2012, scheduled for Poland and Ukraine.

UEFA's club football commitments seem solidly grounded. It has signed four commercial partners, Ford, Heineken, Mastercard and Sony, out of six intended for the 2009-12 Champions League seasons.

The competition's playing format has been copied around the world, though not its riches. European champion Manchester United earned US$67 million in prize money and television shares last season.

Critics say the Champions League has created a self-perpetuating elite, leaving other clubs unable to bridge the gap. UEFA president Michel Platini, however, wants the power to ban indebted clubs from the competition.

His words were widely interpreted as an attack on the English teams that now dominate the Champions League.

Chelsea, last season's runner-up, owes more than US$1 billion, though its interest-free loans from Russian owner Roman Abramovich are not yet vulnerable.

Manchester United, valued at US$1.8 billion by Forbes Magazine, has big debts, but it also has a global brand.

When shirt sponsor AIG received a bailout from the U.S. government last month, there was speculation the insurance firm might pull out of its 4-year, nearly US$100 million deal. Grothe said it would be a win-win scenario for the club.

``Man United would get a hefty signoff fee to release (AIG) and the day after they could close a deal which is even bigger,'' he said.

An important test of football's prospects will come next month, when domestic television rights are offered in Germany to broadcast the Bundesliga.

Public broadcaster ARD and subscription service Premiere are favored to win the deal, with the price is expected to be more than US$544 million a season.