The footie TV rights war is risking consumer revolt

As the battle for sporting broadcast rights grows ever more competitive, is it time to move to a tender process where the winners are judged on a wider set of criteria than merely the size of the cheque? asks Raymond Snoddy.

It was billed as the richest, most heart-stopping contest in the history of world sport. The current football television rights deal meant that either Derby County or Queen’s Park Rangers on Saturday at Wembley were going to walk off with £135 million.

You get to such an enormous, and some might say outrageous, sum by assuming the promoted one only lasts in the Premiership for a single season and then gets four years of “parachute” payments in the Championship. Surviving two years plus parachute payments would take the total to over £200 million.

Since you ask, Derby were dominant in the second half and then lost to a 90th minute QPR winner. Cue pandemonium.

Yet before QPR have settled in fully to their return to the Premiership, talks could be under way that might take the prize for winning the £135 million game in the 2016-17 into the stratosphere.

As currently delineated the next Premiership television rights battle between BSkyB and BT could be the most nerve-jangling on record and for the first time there is a real possibility that Sky could turn out to be the business equivalent of plucky Derby County – playing well, dominating even, but ultimately losing big time.

The danger of course in such a suicidal confrontation is that the biggest loser of all will be the consumer and there could be millions of seriously aggrieved football fans as a result.

The likelihood is that the nearly blind auction – there is some evidence of a little nudging of bidders on the side – will push up the cost of rights yet again. Other bidders who might come along for the ride will have the same effect.

It is equally likely that the current £3 billion deal will be closer to £4 billion – and, ahem, the sky really is the limit.

Almost certainly the costs would be so great that they would have to be reflected in subscription charges, although BT might continue to see football rights as a bit of a loss leader to protect, or even drive, its crucial broadband business.

The present situation is bad enough. Sky has five packages of rights and BT one, so you have to deal with two companies to get access to all the televised games.

The ‘one’ is there at the insistence of the increasingly unloved Brussels Commission and its adherence to a narrow definition of competition which can act against consumer interests.

If BT simply out-muscles Sky, as it did in last year’s extraordinary £897 million deal for Champions League football, then apart from cost, football viewers would not be greatly inconvenienced. They could simply move across to BT.

This of course would be extremely bad news for Sky. For all its bluster about the breadth and depth of its programme offering, the main driver of subscription remains Premier League rights – particularly so following the unfortunate loss of Champions League.

Last time it is believed in the early rounds that Sky was ahead in the bidding for one or possibly two of the packages but that in the others BT was either ahead, or the outcome was too close to call. The satellite broadcaster apparently received a hint that it would have to sharpen its pencil.

The most probable outcome is that there will be one big winner again and this time with BT Sport firmly established the pissing competition could indeed be won by the telecommunications company.

But a bit like a hung Parliament it is more than a possibility that three packages could be won by Sky and the other three by BT.

Such an outcome, and the associated higher costs, could lead to very disgruntled consumers and even to customer revolts. Heading off to watch the really important games down the pub would be a rational strategy if the Premier League and the broadcasters do not show greater customer sensitivity.

Can anything be done about such an unsatisfactory outcome?

Yes, but not easily though, given the drivers at play here.

Ultimate responsibility has to lie with the Premier League. They are the owners of the League’s television rights and they can chose to do with them what they will.

It must be tempting to continue running an auction every three years and raking in the money, even though such a process is increasingly disadvantaging the game’s supporters and most of the money simply goes to mercenary, multi-millionaire footballers.

Is it time to move to a tender process where a minimum qualifying price is set and the winners are judged on a wider set of criteria than merely the size of the cheque?

There was, after all, an exceptional quality clause in the auction for ITV franchises even though it was never used. The criteria could include the cost of subscriptions, scale of the contribution to the grass-roots game, support for lesser, struggling teams in the lower leagues and the offer of a number of games to make make available to everyone.

As things stand the Premier League is surely in danger of over-reaching itself through the unbridled greed of the growing number of foreign owners of the leading clubs.

If the Premier League sticks to its guns it is even more difficult to imagine a solution.

An ideal way forward would be for the two main bidders to reach an “understanding” that would limit the size of the bids. That is very unlikely to happen and would, almost certainly, be illegal.

Another option would be to require all the matches involved to be more widely available on fair and reasonable terms and let the broadcasters compete on the quality of their coverage.

This also is unlikely to happen because it would dent the element of exclusivity that drives the price of the rights up so high in the first place.

So it’s time to set up a competition to try to come up with the answer to an intractable problem surely not quite so difficult to crack as longitude.

First prize – a history of QPR.

To get all the latest MediaTel Newsline updates follow us on Twitter.