Sport broadcasting’s major dilemma

It’s time big sports rights owners plucked up the courage to take a more sophisticated view of their long-term interests rather than maximising profits, writes Raymond Snoddy

Television sports rights have always come down to a simple proposition. Do you trade money against visibility and access for your sport – and what are the consequences of choosing any particular point on the spectrum between the two extremes?

The UEFA Champions League, with negotiations on a new three-year deal expected to get under way in the autumn, is perhaps the most extreme of the species.

Once upon a time Sky and ITV shared rights in what seemed like a very rational choice between dipping into very reasonable subscription revenues while retaining the excitement and presence of free-to-air television.

Then in the UK at least, BT for its own perfectly respectable business reasons that had more to do with broadband retention than love of football, blew the working consensus apart.

UEFA could hardly resist the temptation of the astonishing £897 million BT deal even though it was the television equivalent of playing the games behind closed doors.

It was hardly in BT’s interest to promote heavily the number of games shown on its freely available sports channel with audiences reported to be in the region of 200,000.

Over time the lack of visibility that inevitably flows from putting important sports competitions behind subscription paywalls leads to reduced interest and, eventually, damage.

Football organisations are obviously under enormous pressure from the top clubs, which want to throw ever-increasing millions to try to retain a small number of the very best players.

Yet despite such tendencies, somehow the instant pressure, and greed, has to be resisted in favour of a mixed broadcasting economy – and one that pays some recognition to the interests of fans and viewers and ultimately the competitive health of the sport.

The solution, and one that should be adapted in the next round of deal-making, even if cash totals decline noticeably as a result, is to build in a free-to-air TV partner as a compulsory component.

Subscription will still raise the largest part of the revenue but the real trick is to find a smarter balance between pay and sponsorship/advertising.

There have been rumours – naturally denied by BT – that UEFA is less than overjoyed by the lack of visibility that the BT deal has produced.

There have been recent reports that Channel 4, which has lost horse-racing to ITV and Formula One to Sky, is interested in sub-letting one game a football week from Sky.

That would be a welcome start, although ITV would be a more obvious candidate to deliver greater visibility.

A new balance should include an absolute requirement that same day exclusive highlights should appear on a free-to-air channel.

There should also be a minimum of one and possibly two live games available each competition week on terrestrial television.

It would make sense for everyone, apart from footballers earning more than £50 million a year.

It’s always very difficult to call the top of any market but with football – Premiership as well as Champions League – the auction mechanisms that have been driving the costs of television rights ever upwards may be starting run out of steam.

There are growing signs that subscription TV channels can no longer absorb the extra cost of such auctions and are passing them on in the form of higher monthly payments.

If they are not careful they could run into higher levels of consumer resistance and increased churn rates.

At the other end of the spectrum more attention needs to be given to events that are protected and have to be shown on terrestrial television which still, despite an endless array of new devices, attracts by far the largest audiences.

As Barbara Slater, director of BBC Sport, argued recently: the free-to-air channels that quality for access to protected events – BBC One, BBC Two, ITV, Channel 4 and Five – accounted for just 7 per cent of the sport broadcast on TV last year but delivered almost two-thirds of viewing.

As it sits counting its TV rights money it is a fact that UEFA should ponder.

In a world of increasing fragmentation and self-chosen bubbles sport can unite in a way that few other human activities can but only if it is freely available.

One of the first comments by the new BBC chairman Sir David Clementi was to call for a review and possible extension of the protected events. It was a welcome effort but unlikely to bear fruit given that the pay TV giants would like to get their hands on everything if offered half a chance.

Given the multi-billion international players involved it will be a decent achievement to hold onto what we have got – everything from the Olympics and the World Cup to Wimbledon, the Grand National and the Derby.

Slater has also argued that the legislation that was written years ago in the analogue era urgently needs to be updated to reflect the changes in viewing habits that have taken a minority of television consumption to apps, online and away to mobile.

The old trigger points are far too tightly drawn for the current broadcasting environment.

The rights for “the crown jewels” have to be offered to free-to-air channels, which can be received by at least 95 per cent of the population.

That 95 per cent figure could come under pressure if it has not done so already.

Happily, Culture Secretary Karen Bradley is both aware of the problem and is prepared to do something about it in the digital economy bill.

Unsurprisingly, Bradley has no intention in re-opening the list.

“We want to future-proof these regulations so that in an ever-changing digital landscape the public will still have access to the crown jewels of sport on free-to-air channels,” says Bradley.

That adds up to a big tick for the Culture Secretary.

As for the rest, the hope is that the big sports rights owners will have the courage to take a more sophisticated view of their long-term interests than maximising the pile of cash they can accumulate.

It would be in everyone’s interest – not least that of viewers and consumers.