THE HALF DECENT FOOTBALL MAGAZINE

Since launching Sky Italia last year, Rupert Murdoch has found himself at odds with Italian prime minister Silvio Burlusconi in the chase to secure rights to Serie A matches. Matt Barker weighs up his chances of success

Sky Italia launched in July last year, amid Square Mile scepticism and a fair bit of local disapproval. Undaunted, and with BSkyB confidently cited as the archetype, the new channel quickly set about securing rights for Serie A coverage, aiming to reach three million subscribers by the end of this year and to break even by the end of next.

Things haven’t gone quite as planned, with piracy problems in particular threatening to overwhelm the whole enterprise. Calculations vary, but some claim households with access to pirated Sky signals in fact now exceed legal users (current figures are around 2.6m), effortlessly reaching that coveted three-million mark.

Perhaps more urgently, Rupert Murdoch’s News Corporation has also found itself in direct conflict with prime minister Silvio Berlusconi’s Fininvest media empire, with football becoming the principal combat zone. Sky’s television rights were only exclusive in terms of satellite coverage, leaving the new terrestrial digital technology up for grabs.

Unlike the rest of Europe (with the exception of Greece), Italian clubs negotiate their own individual TV deals. In July this year Mediaset (Fininvest’s broadcasting arm, run by Berlusconi’s son, Pier Silvio) announced they had secured digital terrestrial rights for home matches involving Inter, Juventus (whose shirt sponsors for Serie A games are Sky Sports) and Milan – the big three who together claim 70 per cent of all Italian football supporters – in a deal worth €86m (£60m). Shortly afterwards Roma, Sampdoria and newly promoted Ata­lanta, Livorno and Messina signed, too.

Mediaset are looking to undercut Sky by introducing a pay-as-you-go scheme allowing users to pick and choose which games they want to watch. Cards will be available at news­agents and kiosks, with fixtures available for as little as €2 (Sky Sports’ all-in packages cost €32 a month).

At present just 500,000 homes have terrestrial digital access, but that figure is now expected to rise rapidly, encouraged by a government cash injection of €100m to ease in the new technology. “Conflict of interests” hardly does justice to the bewildering tangle of cronyism and cross-ownership rampant in Berlusconi’s Italy. Adriano Galliani, president of the football league, is also managing director of Milan (owned of course by the bandanna-wearing prime minister) – and an ex-executive of Mediaset. State broadcaster RAI recently found itself under attack in parliament, blasted by Berlusconi’s Forza Italia MPs for failing to act in the public interest after losing out on football rights to Berlusconi’s television channel.

The deal lasts until the end of the 2006-07 season, when Mediaset will then have the option to obtain satellite rights as well – an agreement that would put a serious dent in Sky’s credibility (currently paying €500m for the 2004-05 to 2006-07 seasons) and could effectively push them out of the market.

There is an obvious concern that this is creating a cartel among the rich northern clubs. Inter, Juventus and Milan receive half their total revenue from television. Of the €500m paid by Sky, €225m goes to the Turin and Milanese clubs, €75m is split between Roma and Lazio and €200m divvied up between the remaining 15 sides in the top division. Digital rights are little better for the smaller, provincial teams – Palermo landed a relatively paltry €2.1m per season from their contract with Telecom.

Opposition parties have been calling for the introduction of a collective television deal (the current arrangement was introduced five years ago), mindful of the game’s economic frailty. The English model is regularly held up as the one to follow and would doubtless suit Sky (who have just announced a similar agreement for their Serie B coverage). But would it suit Mediaset? And how would Milan eccetera feel about losing such a significant slice of their income?

Let’s imagine a meeting between Galliani and Berlusconi: the club MD moaning to the owner about proposed changes to television rights. The owner has a quiet word with the football league to see if there’s anything that can be done; the league president reassures the club, has a little chat with the prime minister and tips off the people at Mediaset. All done in the time it takes to gulp down an espresso – no one has to leave the room, make a phone call, or send an email.

Little wonder, then, that in such a climate some are beginning to rather warm to the idea of Murdoch. The recent launch of the Sky Italia News channel was lauded as a much needed independent voice in the Italian media and could yet prove to be the channel’s unique selling point. Meanwhile, the centre-left Democratici di Sinistra (DS) party are promising to step up their proposals for a collective rights deal as part of a wider campaign to improve the balance of the game’s finances. Could the DS then end up finding an unlikely ally in News Corporation? Stranger things have happened…

From WSC 213 November 2004. What was happening this month

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