Why did English Premier League scrap huge broadcasting deal with Chinese TV?
The English Premier League has ended its television broadcasting deal with Chinese streaming service PP Sports with immediate effect.
The contract with PPTV, which is owned by Chinese retail giant Suning, was one of its most lucrative internationally, reportedly worth about £550 million (€616 million).
But the league did not give a reason for terminating the agreement after just one season of a three-year contract.
“The Premier League confirms that it has today terminated its agreements for Premier League coverage in China with its licensee in that territory,” read a brief statement on Thursday.
“The Premier League will not be commenting further on the matter at this stage.”
Did politics play a part?
Reports suggested that the Premier League had engaged in a standoff with PPTV over a withheld payment when football fixtures were postponed for three months in March during the COVID-19 pandemic.
“From Suning’s side, there seems to be some concern about the value for money they’re getting from the deal with the Premier League,” said Simon Chadwick, professor of Eurasian sport at Emlyon Business School.
“Essentially Suning had paid for something that wasn’t being produced, in this case, football matches”.
“But this termination does seem to have been the nuclear option because there are lots of other broadcasters across the world who are in negotiations with the Premier League over this”.
When football resumed in June, the Premier League was said to have rejected proposals to renegotiate the contract with PP Sports.
But Chadwick told Dailyrater the issue seems to be about more than the pandemic and money.
“We know how closely politics, business, and football can be related.”
“An announcement of this magnitude – it’s a lot of money and its high profile – has been timed during a period when relations between the two countries are becoming tenser.
“On both the Chinese and English side, there is likely to have been some state involvement in the decision-making”.
Earlier this year, the British government decided to exclude Chinese tech giant Huawei from involvement in the UK’s future 5G network.
Dr Paul Widdop, a senior lecturer in sports development at Manchester Metropolitan University, agrees that the contract termination is linked to the relationship between the UK and China.
“Suning’s financial returns and accounts in the last few months have been very good, so I don’t think this a notion that they have paid too much for a deal with the Premier League,” he told Dailyrater.
“Sport is an easy way of promoting dissatisfaction to the world because of its high profile.
“This announcement from the Premier League does not sit well with me, I think it has an underlying political motivation”.
In a deal signed in July 2019, PP Sports provided Chinese football supporters with a live broadcasting service, including the use of special effects to create a match atmosphere.
In the wake of the contract’s termination, there has been no announcement about new negotiations for the broadcast of the Premier League in China’s lucrative market.
But Simon Chadwick does not expect to see a scramble from Chinese broadcasters to fill the void of PP Sports.
“What we now have is a much more fractious relationship between London and Beijing and whatever negotiations that take place are going to be set in that context.
“It really does raise questions about how much a new deal will be worth, but also how long it will be before we see a deal.”
The decision to end the contract with Suning will also likely affect the finances of Premier League clubs, who have already been hard hit during the pandemic.
“If you take away a huge part of revenue budget, as well as supporters, clubs are really going to struggle with wage packets”, said Paul Widdop.
“There is always going to be a knock-on effect as well to the leagues below and English football at the grassroots level.”
Paul Widdop also noted that the loss of PPTV will be a serious disappointment for Premier League supporters in China.
“This is an industry that is very successful with the Chinese audience, and there is now a danger of the Premier League losing market share that they might never get that back”.
“This is now is a challenge for the Premier League to think about it will financially manage this shortfall and what that will mean in terms of payments to clubs,” added Chadwick.
“While there is certainly an appetite for Premier League football in China, it’s always a tough sell and this is a significant development.
“When you look at their rivals in La Liga, Serie A, Bundesliga, this potentially puts the Premier League at something of a competitive disadvantage.”