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Our View: TV football money debate more complex than it seems

FIRST the auditor-general and then the finance minister, Harris Georgiades, decided to express their outrage over the silly money Cyta was discussing paying some football clubs for television rights. Cyta is after all a public organisation and state officials have every right to take a position on how it should spend public money.

This is a recent development as in the past Cyta was wasting unjustifiably large amounts of money sponsoring tiny, provincial clubs. The argument used by politicians in defence of this practice was that the authority was making a social contribution by funding football. This would have had some merit if football clubs had academies developing local talent, but this was never the case. Even the small provincial clubs line up teams made up of eight or nine foreign players so the argument about social contribution is total nonsense.

Odysseas Michaelides issued direct warnings to the Cyta board that was considering paying champions Apoel €3 million annually for a three-year period, starting from 2019, saying it should not spend such money unless it could prove it made financial sense. The cautious Georgiades fully agreed, speaking about “moves which go beyond financial logic”.

Cyprus football has been living beyond financial logic for many years. Most clubs are cash-strapped and debt-ridden, having been living beyond their means for years, depending on state hand-outs, over-generous sponsorship and broadcasting deals with Cyta and tolerant authorities that turn a blind eye to their tax debts. It is not a sustainable model and does not serve our society as most of the money goes towards paying foreign players.

Yet while Cyta may have in the past squandered tens of millions every year in handouts to clubs, now its actions could have some financial justification because if it loses the broadcasting right for Apoel matches to one of its competitors (Cablenet is said to have offered Apoel €3m per year), it could lose a lot of other business. Companies often sell television subscriptions on the strength of their football coverage in packages that might include internet and mobile telephony. Having broadcasting rights of a popular team is a marketing tool that helps sell other services.

In this sense, Michaelides is wrong to insist that a decision taken by Cyta has to be financially justified. There are always risks involved in any business decision, but the reality is that the bidding war for the Apoel broadcasting rights is being waged because companies calculate that a deal would help their business development. How can anyone be certain that a business deal will prove profitable? It is therefore rather naïve of Michaelides to warn that if a business move does not prove successful the Cyta board will be criminally responsible for squandering public money. By this logic, Cyta should not be allowed to engage in any business risk-taking.

 

 

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