|
Although it was a joint venture the deal was that NTL would pay the League a total of £65 million over a 5 year period in return for them effectively taking over all of the official websites. So far £30 million has been paid with the deal estimated to be worth almost £200,000 a year to Burnley Football Club.
Since we last wrote about this subject it has been confirmed that NTL failed to pay their next instalment of £5 million, which was due on July 19th as payment for the previous 6 months effectively costing Burnley in the region of £100,000.
The League and NTL were reportedly deep in discussion ‘to establish the viability of this ground breaking venture so that it can deliver on its future commercial potential’ and have spent the last week talking the deal over with the clubs.
Given that the men in charge of the League, Keith Harris and David Burns, had lost all credibility (the may even lose their jobs before the week is out) even before the ITV Digital court fiasco, NTL must have thought that now was the time to try and get out of their obligations and they seem to have done a pretty good job of it.
It is believed that the new deal will see the payment of the £5 million missing instalment, the writing off of some loans made to set up the joint venture and the clubs taking an 80% cut of the profits rather than the current 50%. As for the remaining £30 million forget it. Leaving Burnley potentially a further £600,000 down over the next 3 years.
It does seem that some agreement has been reached as in the last few days more clubs have launched the ‘premium content’ subscription part of their sites, which they would be unlikely to do if they were unsure if the joint venture was on the verge of failing. There were fears, that unless agreement was reached, fans would be left with a 2 tier system with some sites charging £34.99 a year and others either not charging at all for a similar service or taking their websites back in house.
Just from talking to fellow Clarets it doesn’t sound like there has been a massive take up of Clarets World. I would be surprised if 500 people have signed up but if they have that is £17,500 a year, less NTL’s cut, less operating costs and other expenses and it doesn’t amount to an awful lot. Another problem is that people do not like being asked to fork out £35 for a service that was previously free. It creates a degree of bad will at a time when it is needed least but the worst thing is that it is not Burnley FC’s fault because under the terms of the ‘ground breaking venture’ the clubs do not have a say about what services or products are sold on the official sites in the name of ‘future commercial potential’.
|
When the joint venture began there was little or no commercial advertising on any of the official sites but the sites now not only have to carry advertising but to run ‘Breaking News’ on where to buy the latest CD from. If you go to any official site and click on ‘Shopping Zone’ just below the top banner you can visit an array of online shops. All of them have entered into a partnership with NTL who take a cut of the profits along with the individual clubs concerned and the clubs have to advertise them.
I’m no businessman but how much profit can there be in selling a CD for £8.99 especially when you consider that any money made has to be split 3 ways? In fact I was caused a degree of embarrassment over the summer when I saw the headline ‘Buy Heathen Chemistry for £8.99’. I assure you I am not joking about this but my initial thought was that we had unearthed an unknown footballing prodigy from some obscure African state and the fans were being asked to help buy him. Only when I read down did I realise that it was the new Oasis CD.
The betting and mobile phone services are all linked in with the deal but there are so many sites offering these services that it is difficult to believe we’re making much from these areas but you can always sell the family silver.
In March 2002 NTL signed a deal with the online auction site QXL and that is why again we have ‘news’ stories about Ronnie Jepson’s training top. Presumably the clubs decide which items to sell at the auction site and Burnley seem to have drawn the line at flogging Gareth Taylor’s socks but Preston North End amazingly auctioned off a place in their squad. I think it went for about £4,000 in the end with the winner getting his own squad number, a place on the pre season photo and ‘the chance of being called up in an injury crisis.’ Believe me this is not a joke and it is not funny.
If the ‘renegotiated’ deal does go through we will see Burnley having to replace £200,000 of almost guaranteed income a year with an extra 30% of what it can get from its shopping portals and ‘premium content’ areas. Believe me it is going to be a lot lot less than £200,000 and the fear is that they will have to do even more advertising for NTL’s partners as a way of making money.
It could be a fitting legacy from Burns and Harris, then men charged with looking after the interests of clubs in the Football League, and it might not be too long before they are reduced to selling Oasis CD’s from a suitcase.
I must stress that I am not having a go at Burnley FC, if anything I’m trying to explain that all this ‘buy this and buy that’ is not their fault but it seems that the League are agreeing to a deal where the only profits will come out of flogging more stuff.
When Bart Simpson sold his soul it didn’t take him too long to realise that he didn’t like it, especially after he had spent the money.
How long will it take before the Football League realise that.