Pay and display

Clubs are slowly starting to launch their own independent television channels. Patrick Harverson wonders what this could mean for fans

Here we go again. Premier League clubs are falling over themselves in their hurry to sign deals with broadcasters to establish their own television channels, just as they flattened everything in sight in their stampede to the stock market during the past year.

And as in their rush to sell their shares to the City, the eagerness to create new TV channels raises some doubts about the clubs’ ability to make good business decisions. There is a place on the stock market for a few well-run clubs, but there are some who have floated in the past year who don’t belong there – a point painfully highlighted by the performance of some clubs’ share prices recently.

Similarly, while the recent news that Manchester United will launch its own channel in partnership with Sky Television and Granada next season made business sense, some of the other clubs planning to take the same route might want to think again.

United may be big enough to pull it off – the club reckons it need only attract 10 per cent of its 3m UK fans to the channel to break even on the project – but what about Newcastle United, Leeds United, Arsenal, Chelsea and Southampton, all of whom are considering setting up their own channels? It seems that any decent-sized member of the Premiership with ambitions to be a ‘player’ in the brave new media world of digital and pay-per-view television is likely to be doing the same.

So what is all this about? Surely there is enough football on television at the moment to satisfy even the most fanatical supporter? And without the ability to broadcast live Premiership games (the exclusive rights to which remain firmly in Sky’s grip), who is going to bother to tune in?

The clubs are clearly hoping to make money from their channels. Yet it is unlikely that any of them, even Manchester United, will be in a position to make a profit from their club channels within the first couple of years. Filling hours of air time is an expensive business, says Don Perretta, head of business development at Chrysalis Sport, the country’s leading independent producer of sports programming, responsible amongst others for Channel 4’s Italian football coverage, and ITV’s Formula 1.

It can be done quite cheaply in terms of the cost per hour, but the overall cost will be tens of millions of pounds. You have to have the technical staff, the satellite uplink, ten cameras at a match, the editorial staff, everything, he says.

To make it pay, the clubs will have to attract a good number of subscribers. Yet they will not be able to charge high fees, given that fans’ are increasingly unhappy with the overpricing of tickets, merchandising and – not least of all – subscriptions to Sky Sports. And if the clubs fail to attract many subscribers, they will struggle to attract advertisers, who would provide the other main source of revenue.

Admittedly, clubs might be able to make some money from selling merchandise on their channels, but this is hardly likely to endear them to their viewers. Nor will lengthy ad breaks to sell replica kits and other club gear make for compelling television.

The likely lack of quality is something that Chrysalis’ Perretta believes could kill some club channels at birth. He believes they will be simply too boring to last very long. He may have a point, although few people have lost money overestimating the devotion of football fans to their clubs.

Essentially, the channels will be televisual versions of club call phone services. Instead of being told that Darren Anderton is still on the injured list, fans will be able to see him receiving treatment from the physio, accompanied no doubt by cheery comments from the player predicting his imminent return. Team and club news (or propaganda) will be the first order of the day.

There will also be archive material, live reserve and youth team games, coverage of pre-season friendlies or testimonials, and endless player profiles. Much of it will look like football’s answer to afternoon television: At home with Becksy and Posh; Cooking the Calderwood way; Ferguson’s Fashion Hour (Duncan, not Alex).

While this might be moderately entertaining for a while, the novelty factor could quickly wear off. Alan Sugar, who says Tottenham have no plans to start their own TV channel, dismisses the entire idea as a “non-starter”. He adds: “You might just have enough material to last the first two days.” And then what?

So why are the clubs so keen on starting their own channels? The answer is they are playing a very long game. The ultimate prize is not the chance to snag a few viewers, flog them some merchandise and maybe make a few quid in the process, but the opportunity for clubs to broadcast live coverage of their own Premiership games on a pay-per-view basis.

Manchester United, Newcastle, Leeds and the rest are preparing for the day when football clubs will own the broadcast rights to all their home games. If, though more likely when, that happens, what better place to show them than the club’s own channel? Instead of sharing the bounties of football’s popularity with Sky, in selling subscriptions direct to their fans the clubs could keep most of the profits for themselves.

And the clubs are quite confident that this day will come. The law dictates that the rights to any televised event reside with the owner of the venue staging the event: in other words, the home club. At the moment, the clubs have been happy to award these rights collectively to the Premier League to sell on to broadcasters, because they believe they can earn more money from pooling their rights than from selling them separately.

However, this arrangement is under investigation by the government, which believes the clubs may be operating as an illegal, anti-competitive cartel against the interests of the game and its supporters. The courts will decide some time in the next two years whether the government’s concerns are justified, but if – as some lawyers predict – the current Premier League contract with Sky (which runs until 2001) turns out to be the last collective deal of its kind in League football, the biggest clubs want to be ready for a new era that allows them to sell their live games to anyone they want, including their own channels.

The clubs are not alone in manoeuvring themselves into position for a possible TV free-for-all. The national and regional broadcasters are also aware that clubs may eventually be able to sell the rights to their own games – after all, it happens already in Dutch and Spanish football, so why not here? As a result, they are keen to join forces with the clubs in readiness for the rights revolution.

So, don’t be surprised if Sky does a few more deals like its joint venture with Man United and Granada. That way, if Sky does lose Premiership football in 2001 at least it would still be closely involved in the sport as co-owners and co-producers of club channels.

It is quite conceivable, in fact, that by 2001 Sky could have signed deals with almost every top club. There is no way Rupert Murdoch is going to give up the Premier League – which saved Sky from oblivion in 1992 – without having established a fall-back position. In the big-business world that is Premiership football today, club channels don’t seem such a stupid idea after all. ❍

From WSC 131 January 1998. What was happening this month