David Conn: MPs put the case for fairer distribution of TV money

English élite could be the only beneficiaries if European challenge to collective TV bargaining is successful

A delegation of MPs fly to Brussels on Wednesday to help the Premier League with its most pounding current headache: the European Commission's challenge to its current television arrangements.

While not an issue which can claim headlines like Wayne Rooney's knee or Peter Ridsdale's goldfish, the ability of clubs to act together to sell their TV rights collectively is the backbone of football's already rocky finances, and the EC's challenge is profoundly worrying the game's decision-makers. The Premier League, the Football Association and the Football League have all made representations that if clubs do their own deals, as in Italy and Spain, the big clubs will reap the bulk of broadcasters' budgets and pull even further away from the middling Premier League clubs, who will struggle for deals.

The six MPs, led by Andy Burnham, MP for Leigh and the former administrator to the Football Task Force, and Alan Keen, the chair of the all-party Parliamentary Football Group, will argue that the EC must allow the Premier League to continue to sell its TV rights collectively. But they also say that the Premier League should be made to share more of the resulting bonanza with the rest of football, including the Football League, eight of whose clubs went into administration this season.

Warning of "devastating consequences" for football if the EC breaks up the current arrangements, the MPs say that the commission is concentrating on the wrong problem. In a statement, they argue: "Existing TV arrangements have, on balance, served clubs and fans well. The biggest problem is the financial disparity between the top league and the rest."

For the Premier League, the battle is not opportune. Even though it is enjoying the unprecedented £1.6bn deal struck at the height of the 2000 media bubble, many clubs have over-borrowed to try to keep up with the Manchester Uniteds, and are struggling even to stay solvent. The thought that the next deal could be substantially smaller, either because the rights are broken up under challenge by the EC, or simply because the TV companies will not pay as much, is terrifying clubs. Rupert Lowe, the chairman of Southampton, warned this week: "If revenues drop substantially, there could be several severe casualties among Premier League clubs. The banks are getting nervous, and clubs with short-term borrowings, like overdrafts, will be in trouble."

But the EC is serious. In its "Statement of Objections" sent to the Premier League in December, the Commission set out its arguments against the Premier League clubs selling its rights collectively and exclusively: "The effect is that only big media groups can afford the rights. This leads to higher prices and shuts out competitors from key content."

The Premier League presented in its defence the standard, accepted argument for a sporting competition: that a League can only function with a semblance of a level playing field between its clubs. Critics say the distribution of money in the Premiership is already too unequal, leading to tedious dominance by Manchester United and Arsenal, with little hope of a real challenge. The end of joint selling, the football authorities argue, would blow any hope of equality away.

"Collective selling of rights has been the cornerstone of the Premier League's success," said the Premiership's official spokesman, Philip French, who pointed to the range of "platforms" - live rights, pay per view, terrestrial highlights and others - which give several broadcasters besides Sky a nibble at the action. "We have had constructive discussions with the Commission, in order for them to fully appreciate the pro-competitive nature of our multiple broadcasting deals. Collective selling also enables us to redistribute unparalleled amounts of money, compared to European football, to a range of community, education and social inclusion projects."

The EC denies it is treating football like soap powder or beer, forcing the "product" to be made freely available to all retailers. "We fully accept that sport is not to be treated like any other sector," the Commission said, adding that it accepted the principle, embodied in the 2000 Nice Treaty, that "redistribution of part of the revenue from the sales of TV rights... is beneficial to the principle of solidarity between all levels and areas of sport." However, the commission maintains that exclusive collective selling to a single broadcaster serves consumers badly because it restricts the number of games live on TV and they have to pay relatively high subscriptions to BSkyB for the privilege. The EC also argues that the arrangement skews broadcasting in favour of the major broadcasters, which has certainly happened here. BSkyB has travelled from near-insolvency in 1992 to its current cultural and financial hegemony in the nation, all thanks to the "whole new ball game" of Premiership matches, live and exclusive.

Negotiations are continuing, and a compromise is expected to be reached eventually, likely to involve a further "unbundling" of rights to allow more broadcasters in, and for more games to be shown. A deal has been agreed with the sport's European governing body, Uefa, over the Champions' League from 2003 to 2006, which will see BSkyB and ITV share the live games, and the clubs having internet and "delayed" rights - hardly a revolution.

Burnham, and his fellow MP James Purnell, formerly an advisor on sport at 10 Downing Street, have travelled this way before. In 1999, the Office of Fair Trading made an identical objection to the Premier League's TV arrangements. While the Premiership was marshalling its lawyers, Burnham saw an opportunity for desperately needed redistribution of some of football's vast wealth to the withering grass roots. Viciously opposed at first by the Premier League, he ultimately persuaded them to pledge five per cent of the 2001-2004 TV deal to grass-roots facilities. The Premier League won the case, and now boasts of its largesse as if it was the clubs' idea all along. With the gap between the Premier League and the rest of football dramatically stretched by Carlton and Granada having pulled the ITV Digital plug, the MPs are calling for the EC case to result in more equal distribution through football.

"There is no pressure from football fans for more televised football," said Burnham. "The major problem is the concentration of money at the top. If clubs are allowed to operate collectively, they should share the proceeds properly."

The broadcasters, meanwhile, are watching, waiting. BSkyB, the BBC and ITV have all said they will not pay anywhere near the same this time as in 2000. While Richard Scudamore, the Premier League's chief executive, has talked up the Premiership's deal, the FA, run by his own chairmen wearing other hats, has very publicly talked its deal, for the England team and FA Cup matches, down.

Although an FA spokesman said this week it was "very comfortable" with the interest generated since its rights were put out to tender last month, some insiders say that the Premiership chairmen believe there is only one pot of money available from broadcasters. If less goes to the FA, more will be left for them. But others say BSkyB is, with no other bidders around, in such a strong negotiating position that its problem is peculiar: how low can they go without driving clubs to the wall and appearing indecent? The Premier League is due, like the Football League, to introduce sporting penalties for clubs which go into administration. One way or another, they may shortly find they need them.