A farcical match in the third division this month, which saw a local derby near Naples abandoned after players were threatened by fans and faked injury to avoid playing, underlined the grim climate in the Italian game, beset for years by match-fixing scandals and stadium violence.
More seriously, from the broadcasters’ point of view, the game’s top level has fallen sharply since the glory days of the 1990s, when Serie A was a byword for footballing glamour and attracted the cream of the world’s playing talent.
Italy’s deep recession has hit spending on luxuries like television football subscriptions hard, but broadcasters have also been worried by a slide in matchday attendances and the now standard backdrop of empty seats in half-filled stadiums.
Swedish attacker Zlatan Ibrahimovic, perhaps the last genuine international star to play in Italy, moved to Qatar-backed Paris Saint Germain in 2012, and though in 2010 Inter Milan won the UEFA Champions League, a competition among Europe’s top clubs, Italian clubs overall have slipped behind their rivals in Spain, Germany and England.
“The reality in Italy is that pay-TV is losing subscribers,” Marco Giordani, chief financial officer of Mediaset, Italy’s biggest private broadcaster told financial market analysts this month.
“Consumer spending is declining, disposable income is declining, the UEFA ranking of the Italian team is declining, the number of teams participating in the European competition is declining, top players are leaving Italy,” he said.
It is in this downbeat climate that the clubs are preparing to appoint an agent to negotiate next year with the television companies for a new deal for the rights to broadcast matches, which are shared between clubs and form well over half of their annual income.
The choice of agent, expected at a meeting on Monday of Lega Calcio, the body that represents the clubs, will set the agenda for at least the next three seasons.
The company favoured to win, Swiss-based agency Infront, has held the contract since 2009 and is bidding to have it extended for another six years in the face of resistance from some of the clubs and from News Corp’s Italian unit Sky Italia.
Sky Italia has long been unhappy with a status quo, which it says holds back development of the game and favours its rival, Mediaset, owned by Silvio Berlusconi, the former prime minister and boss of Serie A club AC Milan.
It has pushed hard for a re-negotiation of the contract, which, uniquely in Europe, awards television rights on the basis of delivery platform but which charges widely different prices to the two main broadcasters.
Sky pays 561 million euros for the right to broadcast 380 matches a year via satellite, while Mediaset pays only 268 million euros for 324 matches on digital terrestrial television, which used to have – but no longer has – a smaller geographical coverage than satellite.
“It is a discriminatory model which is not fair, just or sustainable,” Sky Italia Vice President Jacques Raynaud said in a letter to the Corriere della Sera newspaper earlier this year.
Without the roughly 1 billion euros ($1.35 billion) in television income, the clubs, which racked up combined operating losses of 160 million euros in the 2011/12 season, would be unable to keep going.
But without the 4.4 million subscribers to soccer matches, Sky and Mediaset, the two pay-TV companies left after the failure of the fledgling Dahlia in 2011, would also struggle to keep their operations going.
“Lega Calcio’s problem is how to increase these revenues in the long term so they can compete with other leagues abroad,” said Claudio Aspesi, an analyst at financial market research firm Sanford Bernstein. “But Italy is a market that is not big enough to support two pay-TV operators. That’s the bottom line.”
Sky proposes breaking up the rights into packages on which different operators would be free to bid for exclusive rights, a model it says would open the sector up to more competition, increase subscribers and bring in more revenue.
But many of the clubs are suspicious that such a model would give too much power to one broadcaster, while Mediaset, which is slashing costs and investments to make up for falling advertising sales and is unable to match Sky Italia’s bidding power, fears being left only with unattractive packages.
“If there are good packages and bad packages, we’re not going to be bidding for the bad ones; we’d get out of football,” said one source close to Mediaset. “It would be bad news for us, but we’re not going to pay money for something no-one watches.”
Infront’s chairman Marco Bogarelli, a veteran executive whose career stretches back to the 1980s when Berlusconi pioneered private television in Italy, rejects the frequently heard criticism that he is too close to Mediaset and Milan, for which Infront manages some commercial rights.
He says he is committed to maximising revenues but he has been reluctant to consider changing the current system.
“Our role is to sell the product as best we can. But in the end it’s the market and the fans and supporters that set the price,” he told Reuters.
Infront says it will guarantee a minimum of 900 million euros a year to the clubs for the next three seasons and another 930 million for the three seasons after that in a six-year deal worth 5.5 billion euros.
The deal has been upset by an 11th-hour offer from sports agency IMG, which put in a 3 billion euro bid for domestic and international rights for the three seasons from 2015/16, sources close to the situation said. IMG declined to comment ahead of Monday’s meeting of Lega Calcio.
Sources close to the talks say the clubs are expected to back Infront’s offer, but only for three years, rather than the full six years it has sought, with several clubs still unhappy with the proposal.
The battle has already split Lega Calcio into two blocs, with a 13-strong group around Milan and Mediaset lining up against Sky Italia and a smaller group of seven clubs led by Juventus that want to overhaul the system.
Big clubs such as Juventus, with its big fan base, glorious playing history and ties to car giant Fiat, and Inter Milan, now owned by Indonesian tycoon Erick Thohir, play in a different financial league from smaller clubs such as tiny Hellas Verona or Udinese and already collect the lion’s share of TV revenues.
They have been particularly keen for an overhaul with more cash raised from international rights, which Juventus chairman Andrea Agnelli noted last month earned Italian clubs only a fraction of the sums raised by the English Premier League.
For the moment, though, the betting is that the current arrangement will continue without the kind of revolution that would create new winners and losers among clubs desperately hanging on to their share of a shrinking pie.
“That’s not going to happen,” said one source close to Mediaset. “I don’t think the clubs are going to be that greedy and risk what they’ve got already.”
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