By Neale Harvey
Premiership clubs can expect to glean a cash windfall of £140 million when the league's broadcasting rights come up for grabs in 2021.
Premiership Rugby's current six-year deal with BT Sport is worth around £200m but Saracens chief executive Mitesh Velani believes that sum will pale by comparison to the next deal, with internet giants such as Amazon, Google and Facebook set to heavily influence how rugby is viewed.
Online retail giants Amazon recently acquired Premier League football rights, paying £200m for a package of 20 live games. Rugby will not command anywhere near £10m per game, but financial expert Velani expects there to be a significant uplift.
He told The Rugby Paper: “I think rugby is at a point of inflection at the moment where all the right noises are being made, and if you look at the six-year TV deal, which is a £200m deal with BT Sport, that was a 70 per cent increase on the previous one.
“We're now at a stage where Premiership Rugby – and Saracens are one of 12 stakeholders in that – want to take the deal to the next level, where it increases significantly again and reaches the point where rugby becomes a real commercial frontrunner.
“Thoughts are turning to 2021, the last year of our current deal, so where can it get to? It's difficult to say but I think it can go another 70 per cent (£140m).
“The reason I say that is because you have got the likes of Amazon, Google and those sort of parties getting involved in sport. They're dipping their toes into football and rugby has done a good job in keeping its values whilst creating entertainment. Rugby is seen as a clean sport as far as cheating, anti-doping and regulation is concerned and for that reason I think our TV rights and sponsorship can accelerate quickly.”
Turnover among the 12 clubs hit record levels of £196.4m in 2016-17, an astonishing rise of nearly £65m on the £131.4m they managed three years earlier.
However, wage increases and the introduction of ‘marquee player' exemptions contributed to record losses of £30.5m last year and Velani warns clubs must ensure that not all extra money disappears into the pockets of the players and agents.
He said: “You obviously want players to benefit but with revenue growth comes other sensitivities which we as a league we must consider, such as discipline, integrity, salary caps and controlling that money coming in goes to the right areas.
“In my opinion, those right areas are back into the grassroots and facilities of clubs. We need to get to a point where all the clubs have good stadiums so that we're offering a very professional product, which in turn creates further financial growth.”
While America is seen as a growth area, a disappointing attendance of 6,000 at last season's Saracens v Newcastle match in Philadelphia raised doubts over the concept.
However, Velani is fully behind Premiership Rugby's four-year deal with NBC, adding: “Taking a game to the US market and NBC's involvement is strategically important. We're trying to globalise the game and the principle of the plan is absolutely correct.”
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