Premiership bankruptcy threat as Europe restricts TV deals

Premiership football clubs face a massive reduction in revenue because of European Commission restrictions on how the Premier League sells television rights to live games.

Premiership football clubs face a massive reduction in revenue because of European Commission restrictions on how the Premier League sells television rights to live games.

Analysts are warning that some clubs could face bankruptcy because the league is no longer allowed to sell exclusive rights to one broadcaster. This raises more revenue than dividing the rights between several broadcasters.

The commission is in talks with the league, which represents the 20 clubs in England's top flight, on how it can sell future television rights when the current £1bn exclusive deal with BSkyB runs out in 2007.

The league is already upset that the EC did not stop the French first division from selling its exclusive rights to Canal Plus, the pay-television subsidiary of Vivendi Universal, for a record €1.8bn (£1.2bn) in December. A source said: "Eyebrows were certainly raised at the Premier League that the EC did not even look at this."

The Premier League will not try to renege on its agreement not to repeat its exclusive deal with BSkyB. But its lawyers will point to the Canal Plus deal to argue for fewer restrictions when it sells the rights.

Analysts say buying a significant chunk of the rights is only economic for pay-television broadcasters as much of the profits are made from higher charges levied on pubs showing live games.

If BSkyB is restricted in which rights it can acquire, the only other pay-television operators, the soon to merge debt laden cable firms, Telewest and NTL, could not justify paying a high price on the basis of their viewer figures.

Analyst Anthony de Larrinaga from Société Générale said: "The implication of the Premier League not being able to negotiate an exclusive contract with a single broadcaster could be a substantial reduction in the rights' value and possible bankruptcy for some Premier League clubs."