How the Credit Crunch is Affecting Soccer Broadcast Rights Fees

It isn't, at least not yet, as this Associated Press story points out.

As soccer's popularity grows in the U.S. we'll see a similar situation here - the would-be owners of MLS clubs willing to plunk down a $40 million expansion fee are counting on it. And of course, this story doesn't mention it, but ESPN has long been rumored to be interested in securing the rights to EPL games in the U.S.

GENEVA (AP) If one sport can survive the global financial crisis, it's the world's favorite game: soccer.

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, soccer at its highest level 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 $3.2 billion before
kickoff.

UEFA earned a net profit approaching $400 million from this year's European
Championship, and the Champions League will pull in $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
$2.94 billion paid by subscription broadcasters Sky and Setanta. Global television and
new media rights will earn English league clubs another $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, i.e. 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
$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 $195 million to sign through the 2014 tournament in Brazil.

UEFA, which declined to discuss marketing strategy, had revenue of roughly $2 billion for its three-week tournament 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 $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 $1 billion, though its interest-free loans from Russian owner Roman Abramovich are not yet vulnerable.

Manchester United, valued at $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 $100 million deal.

That might seem like a financial nightmare, but 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 soccer'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 $544 million a season.