Wednesday 22 July ~
After Setanta’s slow motion decline into financial obscurity, the emergence of ESPN as a major provider of live televised football raises a number of questions. The key facts of the American broadcaster’s arrival are well known after it secured the rights to 46 Premier League matches next season and 23 for the next three seasons, alongside rights to SPL matches, secured jointly with Sky, through to the end of 2011-12.
The popular view is that ESPN’s arrival will challenge the Sky/Premier League hegemony. Simon Chadwick, professor of sports business strategy at Coventry University, has been quoted as saying: “I think this could change the sport broadcasting landscape.” Maybe, but it’s not that clear to some.
ESPN is a worthy competitor, with parent company Disney’s market value standing around £26bn compared with News Corporation’s £16bn. It also has a strong track record in the exploitation of sports rights and the two parent companies go head to head on a regular basis in the guise of ABC and Fox News. That said, there is nothing in the public statements of either organisation that would cast them as competitors: just the opposite in fact. And, crucially, ESPN, without a retail end to its business, needs Sky with its six million premium sports customers. The chances are that given this wholesale business model it will sell programmes on to others – Virgin Media, BT Vision or Top-up TV – but that’s not certain.
Celtic and Rangers would have shaken things up had they had gone through with their threat and tabled a bid for the SPL rights. Instead, ESPN and Sky closed the deal at well below the price Setanta had paid. Collaboration between the two isn’t only a UK phenomenon with ESPN Star broadcasting Premier League matches to Asia with Sky’s assistance. For Sky the appeal is that by carrying ESPN every televised Premier League match will be available on its service: the days of Prem Plus are back.
It took an insightful piece in the New York Times to raise an issue avoided in much of the British media, by offering a reminder of the Budweiser “soccertainment” advertising campaign, with the tag-line “you do the football, we’ll do the beer”. ESPN are sensitive to this line of argument and profess to have a “deep football culture” in the organisation. A manifestation of its concern is that the familiar Ray Stubbs has been hired to front the Premier League programme. Chadwick also commented on the risks of ESPN getting the tone of its coverage wrong, telling the NYT: “There is a strong sense of counterculture in English football. They can’t be too glitzy, they can’t be too showbiz, they can’t be too American.”
From 2010-11 onwards ESPN have the same disadvantages Setanta faced with only 23 matches per season, and so the chances are that they are looking beyond the current rights deal. This possibility is foreshadowed in the recent Ofcom report which raises the prospect of Sky being compelled to offer its rights on to other companies – a so called “wholesale-must-offer” model – at more competitive prices. There is also reference to the longer-term establishment of “innovative [broadband] distribution methods”.
For ESPN the compulsion to offer its rights to others is no threat, but in a marketplace with alternative distribution routes available Sky might cease to be indispensable. It’s at the point when we, as consumers, have choice over how to watch “televised” football that the promise of ESPN’s involvement might really be beneficial. Sadly all of that is some way off. In the meantime, Sky seems committed to challenging the regulator at every turn. Brian Simpson