Regulators Move The Goalposts On Football Rights
As the English football season draws to a close, two powerhouses are embroiled in a bitter struggle for ascendancy. Neither side wants to give ground and the outcome remains in the balance.
When it was formed ten years ago, the Premier League opted for a collective selling policy in which rights to games for every team were to be made available en bloc to a single broadcaster. Simultaneously, Rupert Murdoch realised that football could be a key driver in attracting subscribers to his fledgling satellite platform, BSkyB. So a marriage of convenience was born.
The cost of broadcasting rights has risen to the point where, under its current deal, BSkyB pays £367 million a year for exclusive live footage of 66 English Premiership matches (see BSkyB Is The Only Winner In Football Recession). A further 40 games are available on pay-per-view TV. The network has been widely praised for the in-depth nature of its coverage, which has heightened interest in the national game and helped the broadcaster achieve a position of pre-eminence in the multichannel market. For its part, the Premier League believes that the current system encourages more money to come into the sport and ensures that revenues are distributed fairly among the twenty top flight teams.
However, the football authorities have long been on a collision course with Brussels, which regards practices such as collective selling as illegal and anti-competitive. The EU Competition Commission, led by Mario Monti, is in the process of investigating football-related media deals and has decried what it sees as tantamount to price fixing.
Monti claims that the League’s policy prevents clubs from arranging their own deals, restricts the number of live games available to the viewer and precludes other broadcasters from showing matches. The counter argument, put forward by Richard Scudamore, chief executive of the Premier League, is that allowing individual clubs to sell their TV rights individually would be complicated and could see the gap between the rich and the poor widen still further.
Result in doubt The case highlights the difficulties that arise when European trade regulations are applied in the sporting spectrum. The most likely outcome is a compromise in which the EC accedes to the principle of collective selling as long as consumers benefit and Sky’s competitors are given access to live matches. Brussels has already forced European football’s governing body, UEFA to make Champions League games available to more than one broadcaster in each country from next season.
With a new TV rights deal due to be tied-up in 2004, there is a distinct possibility that terrestrial channels could be in the running to secure rights to Premiership matches. Greg Dyke is known to be keen to bring back major sporting events to the BBC and ITV, which has attracted disappointing audiences for its Saturday night highlights offering, would jump at the chance to show live domestic games.
However, while the League and English football fans would no doubt appreciate the extra coverage, it is debatable whether BSkyB would be willing to pay a premium if its monopoly was no longer assured. Sports rights across Europe have fallen in value over the past year and analysts have warned football clubs that TV revenues are unlikely to rise significantly in the near future. This saga could have more twists and turns than the Premiership title race.