This article has printed in “Tejarat_e_Farda” magazine, Dated: Saturday, September 30, 2023.
https://www.tejaratefarda.com/fa/tiny/news-45322
Why Can’t Iranian Football Break Free from the Clutches of Monopoly?
The Tragedy of Broadcasting Rights
Vahid Namazi, Journalist and Football Researcher
1970s, New York- A group of immensely powerful figures in business and media are passionately pursuing football—not “American football,” but what Americans call “soccer.” Among them is Steve Ross, chairman of Warner Communications, a man known for taking bold risks and unforgettable innovations. His empire includes Atlantic Records, major Hollywood studios (home to talents like Steven Spielberg and Robert Redford), and even Atari, the company that introduced the world to video games. Ross first expressed his love for football through the Armenian Ertegun brothers, who ran Atlantic Records, and quickly became consumed with the idea of popularizing football in the United States. With access to modern “toys,” celebrities, music, and various arts, he chose football as his passion project, recognizing its captivating and astonishing potential. Viewing football through an entrepreneur’s lens, Ross saw it as an “unmet need” and an “undervalued treasure.” He targeted this treasure, making it his personal mission. He bought the bankrupt New York Cosmos for just one dollar and hired someone to hunt down the world’s football whale, like Captain Ahab chasing Moby Dick: Pelé, the greatest star of all. It took years to bring Pelé to New York and make the Cosmos a global phenomenon. Their first game with Pelé drew 10 million TV viewers—a record for televised football in the U.S., far surpassing the viewership of any World Cup up to that point.
Though the broadcast of that game, as a first attempt, wasn’t entirely successful (the Cosmos’ first goal was missed due to a commercial break, and Pelé’s second goal was lost to a replay of the previous moment), football captivated America. Apart from heavyweight boxing, no other sporting event in New York had ever attracted such a TV audience. Suddenly, the world knew the Cosmos, and Steve Ross was nearing his goal. Soon, the revenue he earned from broadcasting rights for his star’s games far exceeded his initial investment.
2020s, Across the United States-The frenzy surrounding Lionel Messi in the MLS and Cristiano Ronaldo and Karim Benzema in the Saudi Pro League has prompted sports networks and official domestic streaming platforms to broadcast these stars’ games for Iranian fans. The astute David Beckham, with foresight and opportunity creation reminiscent of Ross’s New York venture, bought Inter Miami, brought the great Messi to America, and is now raking in profits. The MLS’s 10-year broadcasting rights deal (streaming) with Apple TV was purchased for a staggering $2.5 billion, and billboards advertising Messi’s games blanket the U.S. Amid recent economic downturns and rising inflation, Apple made a bold move, outpacing domestic competitors. Apple TV subscribers can watch the league with their existing subscriptions, while non-subscribers pay $100 for access to league games, exclusive analysis, highlight packages, and more. The MLS is responsible for producing the broadcasts, employing 10 to 14 dedicated production teams with specialized equipment and studios. Other networks that previously aired MLS games no longer have the rights, as Apple holds an exclusive monopoly. Apple produces premium sports content for its subscribers, and its lucrative deal with Major League Baseball is also secured. Clearly, Apple uses sports as an effective tool to boost sales of its core products. The $2.5 billion spent on football is no small sum, but for a company with $365 billion in annual revenue and vast cash reserves, it’s akin to R&D costs for a single project. The deal has another side: the MLS. Previous MLS contracts with ESPN/ABC, Fox, and Univision, covering league games and U.S. men’s and women’s national team matches, were worth $90 million per season. The current $250 million annual deal with Apple, solely for league games, marks a significant increase. This approach reflects Apple’s forward-thinking investment in a product that will soon draw the world to the U.S.: the 2026 World Cup, co-hosted by the U.S., Canada, and Mexico, which will undoubtedly bring Apple a lucrative deal.
2020s, Tehran-“The parliamentary budget committee, currently drafting the seventh development plan, should allocate a budget to the IRIB [Islamic Republic of Iran Broadcasting] for football and the services it provides, so it can pay clubs’ broadcasting rights. The budgets allocated to clubs come from sponsorships or government entities. This will deprive our football of international participation in the future. Teams without professional licenses will be entirely excluded from the AFC Champions League.” These are the words of Sadegh Doroudgar, CEO of the privately-owned Nassaji Mazandaran club and a former football federation official, spoken a month ago in an interview with ISNA, practically begging the parliament. Doroudgar noted that the AFC and FIFA value the broadcasting rights of Iran’s Premier League at €450 million! He also added, “We didn’t ask for that money. The parliament should consider what’s feasible and logical for the country.” This is one of the most intractable pains of Iranian football—a deadly disease left untreated, as if resigned to a self-inflicted death. The issue is so convoluted that even top sports officials seem unwilling to untangle it. A football league valued by Transfermarkt at around $120 million, with broadcasting rights supposedly worth €450 million, is so feeble, ineffective, and disorganized that it can neither claim its rights nor properly market its product. Iranian football clubs are malformed entities, often reduced to a building (if not borrowed or owned by a government institution) and a few pieces of paper. They rent stadiums for official matches, hoping the government entity managing the stadium completes repairs in time and praying that the multimillion-dollar stars of rival Saudi teams visiting Tehran after years don’t trip on the uneven patches of Azadi Stadium’s pitch, causing further embarrassment. The cameras broadcasting their games lack the necessary quality, with footage shot by spectators’ phones often clearer than the live feed from the so-called stadium. Broadcasting rights? Forget about it.
Don’t Broadcast Football on TV
Phenomena like cinema and sports, due to their social nature and widespread appeal over the past century, have been prime grounds for creators to capitalize on. As these phenomena grew, they attracted larger audiences, gradually becoming “markets” for revenue generation. The principle of competition in product-driven markets made audiences increasingly valuable to creators. With the expansion of technology and tools for delivering sports content, mechanisms for regulating profits in this market gained attention, and “broadcasting rights” were born.
The broadcast of a sporting event began in 1911 in Lawrence, Kansas. One night, about a thousand people gathered in Kansas to watch a “simulated” American football game between Kansas and Missouri (held in Missouri). Western Union set up a telegraph line in Missouri, where several people relayed game events to a broadcast room. Using a model of a football field, the events were visualized, and the information was telegraphed to those waiting in Kansas, who learned what was happening through an announcer. This was the first step in the vast world of sports broadcasting, later enhanced by a local radio announcer reading telegraphed updates in 1911 and a live radio broadcast of a boxing match in 1921. After the invention of television in 1927, NBC’s live broadcast of a baseball game in 1939 (and earlier, live broadcasts of the Berlin Olympics within Germany and partial broadcasts of Arsenal’s first and reserve teams by the BBC in London) launched a massive industry. Today, the NFL has become one of the world’s most valuable brands, generating over $5 billion annually in broadcast revenue.
The first complete football match broadcast by the BBC was the 1938 FA Cup final between Huddersfield and Preston. That year, Preston had won every game in the First Division, making the FA Cup final a hot event with tickets worth £50—equivalent to £4,000 today, or about 240 million tomans. Regular, organized football broadcasts in the UK began after World War II. It may sound absurd, but while older generations feared new technologies (football was considered a modern, advanced game, evolving beyond mere entertainment with tactics and player formations), televised football added to their concerns. Football clubs were communities that brought people together, and ticket sales on match days generated revenue. Broadcasting football on the newly invented television could dismantle these communal gatherings. However, post-war Britain needed entertainment, and the BBC, knowing this new product could heal war wounds, dove in to bring the joy of football to everyone, not just ticket holders. The first football body to agree to televised matches was an English amateur league, allowing the BBC to broadcast a game between two teams in 1946. Though the live broadcast lasted only 15 minutes due to darkness, it was a major success.
The Dragon Enters…
Kenneth Wolstenholme, a former journalist and football fan, sought work after World War II and his service in the Royal Air Force. When no newspaper hired him, he wrote to the BBC to become a football commentator. For the next two decades, Wolstenholme became synonymous with football. Having never watched TV when hired, his understanding and passion for football, combined with his melodious voice, made BBC broadcasts a massive success, significantly boosting football’s TV viewership.
The BBC secured the rights to broadcast 75 games per season. However, airing full or partial games with known outcomes wasn’t exciting. The trump card in this budding industry was “excitement”—the unpredictability that could glue unsuspecting viewers to their screens. The BBC and its new rival, ITV, knew this well. Thus began the first war over football broadcast rights. Numerous proposals and programs were pitched, but ITV’s ability to integrate advertising campaigns for greater revenue won out, snatching the exclusive rights to the entertainment market’s darling product from the BBC. The concept of “broadcasting rights” was born from this rivalry.
In 1960, ABC, representing ITV, signed a £143,000 deal to broadcast 26 league games, stipulating that players in televised matches would earn income. Clubs, still worried about declining stadium attendance due to major games being televised, tried to block ITV and its rivals to “save football.” But the BBC and ITV, having discovered the sport’s potential, included clauses to protect smaller, less-attended clubs. They succeeded, convincing league officials. On Saturday, September 10, 1960, Blackpool vs. Bolton was broadcast live on ITV with the slogan “Taste the Thrill, Watch Top-Class Football.” The game’s timing ensured no other matches overlapped, allowing fans of other teams to attend their games in stadiums while being drawn to TV. The match ended in a goalless draw, sparking doubts about football’s touted excitement. Yet, the rush to TVs proved otherwise. Clubs and the English Football League demanded ITV increase player appearance fees fivefold. ITV refused, halting live broadcasts. The drought lasted 23 years.
Football didn’t fail, though. The 1966 World Cup final drew 400 million TV viewers in Britain. Advances in technology, enabling video tape recording (replacing reels that caused missed moments), revolutionized broadcasts. The iconic Match of the Day, now hosted by Gary Lineker, England’s great striker and 1986 World Cup Golden Boot winner, was born—a football show analyzing weekly games, copied countless times. The 1970s and 1980s saw growing broadcast contracts and TV programs. The Big Match, with Brian Clough’s controversial commentary, gained popularity, and ITV secured the rights to the world’s most thrilling game again with a £5.2 million two-year deal. As public interest grew, ITV profited more. In 1988, to avoid being left out, five major clubs—Arsenal, Manchester United, Liverpool, Tottenham, and Everton—threatened to form a Super League unless they got more money. Their threat worked, fattening their contracts.
Football sold well. With new money, rebranding was needed to deliver a higher-quality product. The Premier League replaced the First Division, and a flood of cash allowed clubs to sign foreign stars, many becoming English league legends. But this was just the beginning. A dragon lurked in the shadows, ready to turn football into an empire. Sky TV, owned by Rupert Murdoch, paid £304 million over five years to broadcast weekly Premier League games, then renewed in 1997 for £650 million, transforming football and TV broadcasting into a colossal business. With media tycoons like Murdoch and Silvio Berlusconi, football became the new toy of oligarchs. Berlusconi, a TV magnate with a flair for showmanship, used football to captivate audiences. His talent shone at AC Milan—his greatest spectacle. Though a media giant first, buying Milan in 1986 made him a household name in Italy. Football became a powerful tool for revenue and his political-economic ambitions, helping him become Italy’s prime minister. It gave him a vocabulary to rally the lower-middle class for elections, using income from Milan’s consecutive titles and fattened media from lucrative broadcast deals and football shows to achieve his political goals.
What Are Broadcasting Rights and How Do They Work?
Broadcasting rights refer to “media rights for intellectual property of content sold to a specific broadcaster.” If a company wants media rights for a sports organization or competitive video game, it contacts the rights’ owner or distributor, signing a contract for limited or exclusive broadcast rights for a specific period. Undoubtedly, selling broadcast rights funds major sporting events, and in sports like football, it significantly contributes to club and federation revenue.
Broadcasting rights are now the lifeblood of clubs and their primary income source. A league’s ability to negotiate the best terms for broadcasting its matches greatly impacts its teams’ spending power. Higher-spending teams buy bigger stars, climb higher in standings, earn more, and grow larger—a geometric progression turning big clubs into giants while enabling smaller teams to compete. Not all broadcast contracts are equal; exclusive media rights are pricier and more complex, with primary distributors (like football associations) demanding significant benefits for granting rights to a single entity.
Clubs generally have three income streams: broadcasting, commercial, and matchday. Larger clubs and leagues command higher broadcast revenue, often their biggest income source. Revenue distribution varies across leagues. For instance, the English Premier League, with the most lucrative broadcast deals, generates higher club revenues than other leagues. In the 2017-18 season, West Bromwich Albion, finishing last in the Premier League, earned broadcast revenue equivalent to Spain’s fifth-highest-earning La Liga club—only Real Madrid, Barcelona, Atlético Madrid, and Sevilla earned more.
The gap between top and bottom clubs within a league is notable. In England, this gap is smaller due to a more equitable distribution system: when Liverpool won the Premier League, they earned just over twice what last-placed Stoke City did. In Spain, La Liga’s champion earns about six times more than the bottom team, and in Italy, Serie A’s champion earns nearly ten times more than the last-placed team. Smaller clubs rely more heavily on broadcast revenue, with up to 90% of their income coming from it, as they have fewer opportunities for lucrative sponsorships, high commercial revenue, or international tournaments that bring substantial earnings for top teams.
A Truly Premier League!
Since the Premier League’s inception in 1992, its broadcast revenue has skyrocketed. With clubs like Manchester United, Manchester City, Liverpool, Arsenal, and Chelsea, it’s the world’s most-watched league. Total domestic and international broadcast revenue for its first five years (1992-1997) was £254 million. This grew tenfold to £2.4 billion from 2007 to 2010, and the 2019-2022 cycle earned £9.2 billion. The latest cycle, starting in 2022 and running through 2025, splits matches into packages for different broadcasters to avoid monopolies and foster competition. The 2022-2025 cycle, valued at €5 billion (€1.67 billion per season), involves Sky Sports (128 games, €1.3 billion), BT Sport (52 Saturday games, €350 million), and Amazon Prime Video (20 games, €100 million).
The Premier League’s domestic and international broadcast contracts are separate, with different values. Its global brand recognition and appeal make it a powerful product, opening a worldwide market. It’s estimated to be broadcast in over 200 countries, generating over €11 billion from global broadcast packages.
These massive deals have widened the gap between the Premier League and Europe’s other top five leagues. La Liga’s five-year deal with Movistar and DAZN is worth about €5 billion. In Germany, Sky, DAZN, and ProSiebenSat.1 signed a four-year domestic deal with the Bundesliga for €4.4 billion, with the Bundesliga targeting international markets, especially the U.S., to close the gap. Serie A’s deal with OTT and DAZN, worth €2.9 billion until 2024, has global contracts valued at about €670 million—roughly 10% of the Premier League’s total. At the bottom, France’s Ligue 1 has a three-year deal with Amazon and Canal+ worth €1.8 billion, with global broadcast rights via BeIn Sports at just €80 million per season.
Where Do We Stand in This World?
As long as Iranian football isn’t truly “private” and its product isn’t offered competitively, the shackles of monopoly will blind it. That’s the crux of the matter. Even if global bodies like FIFA and the AFC value Iran’s Premier League brand and broadcast rights at over €200 million and issue threats over its lack of privatization, our tragedy stems from a purely political view of football, driven by non-sporting, self-interested motives. No rational investor would pour money into a market where, after a year or a financial season, nothing remains.
Iranian football is entirely under the control of government entities, quasi-state institutions, ministries, and the state itself. Roughly 80-90% of Premier League teams are state-owned or tied to state companies, with the rest occasionally traded among private football enthusiasts (or non-football rent-seekers). The top five teams spend over 700-800 billion tomans per season, and if they’re resourceful, sponsorships cover part of this massive cost. Smaller teams spend 300-500 billion tomans on average, with virtually no income from any source.
The IRIB, the sole broadcaster of football, goes its own way, citing clubs’ and football’s non-broadcast revenue streams to dodge payments. The football federation, in a supposed innovation, proposed that “the Ministry of Sports and Youth, representing federations and clubs, deposit all revenue from pitch-side and kit advertisements shown on IRIB programs into the national treasury. The IRIB should also deposit all revenue from before, during, and after Iranian club and national team matches into this account, with the sum split 50% for the Ministry of Sports (representing clubs) and 50% for the IRIB.” Can any sane person imagine Sky Sports or the BBC demanding the English FA share Manchester City’s kit sponsorship revenue? The more you think about it, the more hopeless it feels.
We are light-years away from the modern world. Until the mindset and governance approach, rooted in total control over all income streams, changes, no progress will be made in attracting productive private investment or increasing profitable products—be it football or oil.