The breaking of a monopoly, a kick in the shins for Rupert Murdoch, more money going into sport – on the face of it, the news that BT has secured exclusive rights to all pan-European club competition in a deal that will see £897m go into the game over three years from 2015 is good. You can no doubt see the “but” coming here.
Monopoly, we’re told, is bad because the monopolist can charge what it wants without the discipline of competition. That’s why Sky’s seemingly inexorable takeover of live football broadcasting seemed so threatening. Sky executives recognised the potential drawing power of football, and other sports, and so set out to build a pay-TV platform by securing exclusive rights. It was classic loss-leader stuff – buy a valuable commodity for whatever it takes, hook the customers, then slowly ramp up the prices. So competition for Sky must be good for consumers. Or so the argument goes.
But what is the situation that now confronts the football fan? If you want to watch the Premier League or the Football League, you’ll need a Sky subscription. That will secure you most games. But if you want to see all the live games, you’ll need a BT subscription as well, because they have limited exclusive rights. If you want to watch the Champions League or the Europa League from 2015 onwards, you’ll need a BT subscription. So if you want to watch the full range of football, you’ll need two subscriptions.
The price of two packages will be more expensive than the price of one. Especially as, for at least one of the packages, you won’t be able to take advantage of the discounts that come with taking broadband, TV or phone line services from the supplier, because only one supplier can provide access to phone, broadband or TV.
If, as a football fan, you can’t afford two subscriptions, you will be able to watch fewer games. If you can’t afford any pay-TV subscriptions, you will be able to watch fewer still. And yet we are told that competition can only benefit the consumer. The facts in this case prove the opposite. The dedicated football consumer was better off when all matches were available either free to air or through a single pay-TV package.
There is, of course, no “right” to watch football on TV. Personally, I have no objection to paying for a dedicated sports channel in principle. That’s partly because I know how lazy the free-to-air broadcasters got when they had their own monopoly, partly because TV is about more than sport, and partly because the majority of people are not that interested in sport.
But it’s also true that sport, especially football, is a big, important part of the national psyche. And that watching sport at the top level fuels interest in its grass roots. That’s why it’s a concern that the price of watching football on TV is rising.
In the aftermath of the BT deal being announced, there was a fair bit of hairshirtism. People said: “This should make people go to watch actual games live instead”. But doing one thing doesn’t exclude the other. The people who go to live games are those most likely to want to watch lots of other games on TV. And not going to games, especially in the Premier League, is often a product of lack of available tickets or high prices, rather than a deliberate choice to be an armchair fan.
It’s worth mentioning here that additional money from the TV deals currently in place could have been used to lower ticket prices at no cost to clubs or players. The game chose not to do that, and it seems unlikely it will have a change of heart when the BT money is banked. Big TV deals feed ticket price rises – all about the value of the product, see? – so in fact TV rights sales only benefit the rights holders.
Much of the money from the TV bonanza of the last 20 years has overwhelmingly gone into the pockets of players. It has also made English football clubs attractive targets for speculators and investment funds, breaking the bond between club, sporting institution and community that had helped to give the modern “brands” their value. There’s no evidence to suggest this latest deal will do any different.
In fact, it could make things worse. The bigger deal means bigger prize money in European competition. So winning competitions becomes even less important – what counts as winning is qualifying for the competitions that offer the most appearance money. And the gap between those that regularly appear in those competitions and those that don’t will continue to increase.
What that could do is make football even less competitive and therefore even less interesting. With even dedicated fans forced to choose which competition to concentrate on because they cannot afford to concentrate on them all, some competitions will become more of a pull than others. It’s not too hard to imagine a time when the Champions League is the only game in town, and domestic leagues are just sideshows.
The audience could begin to splinter – a process fuelled by the growing tension between fans as backdrops to the brand identity needed in the TV age and fans as ordinary human beings under financial pressure – and when it does, the game will become less attractive to TV companies.
I’m not about to roll out the “football bubble will soon burst” cliché – it’s been said for years and there’s still no evidence it will happen soon. But it would be foolish not to consider the long-term picture. Which is where we return to Sky.
While the BT deal is undoubtedly a blow for Sky, it’s interesting to note the broadcaster has stated its strategy is to grow as a broadcaster, not a sports broadcaster. It has used football to build its pay-TV business. BT is now doing the same. Football’s trouble is that, while other businesses realise its value, it doesn’t. It thinks selling itself to the highest bidder means it is realising its value. But it’s wrong.
Football’s reaction, or at least the Premier League’s, to the latest news is to rub its hands with glee at what it might get offered in the next TV deal. Investing the money it is currently getting in the game to ensure its survival is far too long term, and requires a powerful body that runs a sport to assert itself rather than be happy to delegate power to the temporary owners of popular brands who seek short-term profit before moving on to the next prospect.
A wise football administrator would be one now asking the question, when football loses its value to TV, as it now looks like it might do to Sky, what value does it retain?