Sport

Televising The World Cup Around the World

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Two media stories which have interested me a lot about the World Cup so far.

In the UK, we’re fortunate to still have Ofcom’s Listed Events. This is a list of sports events that are considered national events, and must be available to audiences free-to-air. Despite various attempts to either redefine the list, or scrap it altogether, the list is still in place.

What that means is that if a broadcaster wants to buy the rights to the World Cup, they have to make it available to everyone. That essentially prevents Sky or BT from buying them – at least unless they also used Freeview space to broadcast the games. Hence the BBC and ITV share the rights to big tournaments such as these.

But while Listed Events are common in Europe, elsewhere in the world they are less common. Here are two stories about markets where there have been problems as a result.

Saudi Arabia

The Saudi Arabian national team may not have covered themselves in glory during their 5-0 defeat in the opening game in Moscow, but of course there remains high interest in the team and the tournament as a whole back in Saudi Arabia. This is the first appearance for the country since 2006.

However, across the Middle East and North Africa, BeIN Sports has the rights to the tournament. BeIN is the Qatar-based sports broadcaster that has been growing in size in recent years both in the Middle East and beyond. And this time around there are no fewer than four North African teams in the tournament: Saudi Arabia, Egypt, Tunisia and Morocco.

This is where politics gets involved. As you may be aware, Qatar is currently facing a blockade from some of its Arab neighbours. Notably these countries cutting off diplomatic relations with Qatar include Saudi Arabia and Egypt.

I’ll let others get into the whys and wherefores of this dispute, only to point out that it’s now been going on for a year. But of relevance to football, this affects access to BeIN in some of those countries.

Egypt had been demanding access to at least some of the games, arguing that the fees that BeIN was charging were beyond many Egyptian’s means (US$90 for the tournament plus an $89 decoder if they don’t already have one). BeIN did eventually agree to make 22 games free to air.

Meanwhile, a new station has appeared on satellite – BeoutQ. It’s essentially taking a pirate feed of BeIN Sports and rebroadcasting it on satellite TV, even going so far as to put its own logo over the top of BeIN Sports pictures:

FIFA is obviously upset about this.

The problem is that the Qatar blockade has prevented the import of BeIN decoder boxes into states like Saudi Arabia, and essentially the population is prevented from subscribing to the channel. The same has been true in the UAE, although the difficulties may have been eased a little of late with existing subscribers being allowed to continue. That doesn’t help new subscribers however.

I’ve no doubt that if you know who to talk to, there are ways and means around this, but for the average viewer, watching the World Cup has suddenly become a lot harder.

You might think that operating a pirate satellite channel isn’t that easy. It’s not as though you can put dodgy gear on the rooftop of a high-rise. You need to up-link to the satellite from an official site. BeoutQ is carried on Arabsat, which is a Saudi company. You might infer then, that’s some kind of official support for this piracy. I couldn’t possibly say.

FIFA’s probably between a rock and a hard place, having sold the regional rights to BeIN, but I don’t have an enormous amount of sympathy for them. They sell rights for the maximum they can get, regardless of reaching as many viewers as they can. And whatever they claim, I seriously doubt that a lot of that cash is being reinvested in football around the world.

In the meantime, I’m told by colleagues that Arabic websites are full of links to VPNs and various European and global sites that offer streams of World Cup games.

Australia

In Australia, the public broadcaster SBS held the rights to the 2018 World Cup. But public broadcasters like SBS have been under financial pressure, so in 2016 they did a deal with telecoms provider Optus. Optus held the rights to English Premier League games, and would sub-licence one match per week to SBS. SBS in return sub-licenced 39 of the 64 World Cup fixtures for 2018 exclusively to Optus. SBS itself would only broadcast 25 games over the air, including all Australia’s fixtures and the final.

Optus in the meantime, sold access to their exclusive games to Australian viewers for AUS$15 a month.

Things have not gone well.

It seems as though the infrastructure that Optus is using is unable to cope with Australian demand, and subscribers have had to put up with constant buffering and other issues.

Optus have said it was, “Unprecedented demand,” that has caused the problem. Although as many have pointed out, the World Cup is the single most popular sports event in the world, so demand was probably not likely to be “Unprecented.” And it’s not as though Aussies are exactly disinterested in sport.

As a stop gap, SBS is now showing all the games in the tournament for 48 hours while Optus tries to fix their problems. Whether that’s enough time to get things right is another question. If there are fundamental technology problems, then those will take longer to fix. In the meantime, questions are being asked in the Australian parliament.

As an aside, it’s an ongoing story that big audiences and streaming always cause failures – at least first time around. If England gets through the group stage, then ITV has the first knockout stage exclusively. I hope the ITV Player is robust…

World Cup 2018 TV Coverage – A Few Early Thoughts

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We’re only a short period into the third day of this World Cup, and we’ve already been lucky enough to see a World Cup classic in the Portugal v Spain fixture. That had it all, and although I really don’t like Diego Costa, and I really really don’t like Cristiano Ronaldo, I do recognise class when I see it. And we saw it. Danny Murphy will have to live down his line that Ronaldo couldn’t get that free kick up and down over the wall from that distance, before the man did precisely that with a spectacular free kick that gained him a Spain equaliser and his hat-trick.

But I’m not really going to talk about the football, which has been mixed thus far.

Let’s start with the worst aspect of this World Cup so far – the graphics. They are awful.

The pictures are provided by a company called Host Broadcast Services who cover the game as FIFA dictates. HBS provides the world’s TV stations with its pictures, and these come adorned with FIFA’s graphics. Those graphics during the game are limited to the lower third of the screen, allowing broadcasters to insert their own scoreboxes and logos in the top left or right hand corners.

I assume FIFA’s marketing people has dictated the font which is called Dusha (see an example at the top of this post) and was created especially for this tournament by a design agency called Brandia Central. It’s obvious been designed to convey both a Latin alphabet with design elements that convey the Cyrillic alphabet. FIFA is using it on all its marketing materials in this World Cup.

But the problem is that it’s not very legible – especially so for those with less than perfect eyesight. And FIFA is using it for many of the graphics packages in the coverage.

Choice of typeface is not my main complaint however. That’s the “Goal Scorers” information. During games, the HBS feed brings up the current score in a ‘lower third’ caption (or chyron). It appears at roughly 10 minute intervals, as well as the end of each half and after goals. The end of halves caption is fine because the action has finished and the designers seem happier to take up more screen real estate. If there are multiple goal scorers for a side, then the caption takes up more space.

But the mid-game captions, which are useful for those coming late to the game who want to see the scorers, the captions are terrible. Instead of showing all the goalscorers at once – as Sky, the BBC, ITV and BT all manage to do – they show one scorer at a time, with them slide on and off the screen. They’re too fast to easily read in a small font, and they’re on a loop. So when the score was 3-2 to Spain last night, we saw the following on the screen during the loop:

Ronaldo 4′ (P) – Costa 24′
Ronaldo 44′ – Costa 55′
Ronaldo 4′ (P) – Nacho 58′
Ronaldo 44′ – Costa ’24
Ronaldo 4′ (P) – Costa ’55

And so on until the caption disappeared.

It’s confusing and useless. How many had Ronaldo scored at that moment? I saw his name and lots of 4s.

I don’t doubt that it’s complicated to not include so much information that you fill the screen with goalscorers, and that you keep fonts at a size that works for the whole world (Graphics also have to be ‘4:3 safe’ for those watching on older non-widescreen televisions). But the solution here is a mess, and it needs to be changed immediately.

ITV’s highlights package is disappointing. I was still buzzing from the Portugal v Spain game last night, so I thought I’d catch ITV’s highlights too. They have some good pundits and it’d be nice to hear from them. And there was a highlights show at 10:45pm so I tuned in. What a waste! No studio presentation at all, and a commentator, Joe Speight, who I wasn’t familiar with. At first I thought this was a World Feed commentary (The default English language feed that any rights owner can take from HBS), but it wasn’t. I think the commentary was done ‘off-tube’ from the Broadcast Centre – an increasingly common practice for less relevant games. The commentator often has several screens to look at beyond what we see, but they’re obviously not actually in the stadium. For what it’s worth, most of the games being broadcast in the US on Fox will be done this way. Of course, Russia is a big country, so it can be a logistical nightmare trying to move people around.

However, it was less about the commentary, than hearing what Gary Neville, Lee Dixon et al thought about it. Or not, because ITV didn’t put together a full show. They will for highlights on England’s game on Monday which the BBC has live.

Other things:

  • I’n really bored of Mark Lawrenson being a professional grouch. It’s the World Cup and you’re lucky you’re there. I’m not saying you should sugar coat poor games, but let’s try not to be completely miserable from the first game. So yes, I do want to see the VAR graphics showing the ball crossed the line. Because you know what, another couple of centimetres, and it’d have been ruled offside.
  • Where is ITV’s studio? [Update: Next to the BBC’s. See more details below] They’re not in a mobile studio in Red Square like the Beeb. But it’s so nondescript that Mark Pougatch and co could be in London.
  • The BBC lets you choose the 5 Live commentary on their games (or no commentary at all), but watching via Sky at least, you’re forced to watch in SD. I want HD and the choice of audio!
  • I’m liking the fact that interviews with non-English speakers are being subtitled rather than dubbed. It feels much more modern.
[Update: I’m told that ITV’s studio is right next to the BBC’s in Red Square. Indeed, as I suspected, there’s an entire temporary structure with several nations’ studios. Fox Sports is also there.

You can see rear of the structure in a photo in this piece. So why did I wonder otherwise? It’s because ITV’s window out to the square can be turned into a “green-screen” where they project images from the ground they’re about to go to. ITV loves using this kind of technology – see the News at Ten, which is one big virtual studio. Seemingly they’ve done something clever with their windows to turn them into a green-screen when they want to. Either there’s some kind of clever reflectivity going on – or they just lower green blinds. Anyway, it’s strangely disconcerting, whatever the Radio Times thinks. And I’m not even going to get into the pseudo-dome they’ve virtually added to their studio. Still – at least it’s not Matthew Lorenzo in an underground studio in Dallas, as ITV was in 1994 for no obvious reason.]

Premier League Football Rights – Addendum

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Four months after the winners of the main TV packages for the 2019-2022 Premier League domestic football rights were announced, the final two packages have now finally been sold with Amazon and BT picking up the “remnants.”

First a reminder that previously Sky and BT essentially maintained the status quo in this rights period, while managing their costs. Cumulatively they were paying around £600m over three seasons less than they had previously, with the proviso that the final two packages remained unsold.

Why didn’t those two packages get sold first time around? Essentially, the Premier League’s reserve price was not met. That wasn’t surprising since the packages were poorly conceived, offering multiple matches on a single date meaning that one broadcaster couldn’t maximise the number of potential viewers. Yes, digital technology means that viewers can select what they watch – as we see during early rounds of European club competitions – but they offer a limited number of viewing opportunities.

While the packages haven’t been enormously tweaked since those reserves weren’t met, there is one noticeable change in the new format.

BT has bought Package G which is now 15 fixtures from two midweek fixture programmes, and five matches from the “split weekend.” The “split weekend” is a single weekend’s worth of fixtures spread over two consecutive weekends allowing for a short mid-winter break in upcoming seasons. In effect 10 teams will get a ‘bye’ one weekend, and the other teams the following weekend. That allows for the thick end of two weeks’ break for players of any given club. But it also means that viewers get football every weekend during the “break.”

BT’s five fixtures from that split weekend won’t be simultaneous, so they get a decent bite of the cherry with them. The other 15 fixtures are more complicated. Assuming that midweek fixtures are spread over two nights – Wednesday and Thursday – it means BT would be looking at 3-4 games per night during those midweek rounds. The issue here is that a viewer can really only watch one of those games, assuming the Premier League doesn’t start having kick-offs at 6pm as per the Europa League. Furthermore, some of those games will be ‘unattractive’ to mainstream viewers and therefore unlikely to have been TV picks previously.

BT is paying £90 for these 20 games – or £4.5m a game. That’s significantly down on the £9.2m a game it was paying for its other package. But it bolsters BT’s Premier League offering, enabling it to promote 52 rather than 32 fixtures, so it makes some sense.

Amazon is more complicated. I have not seen any reports on how much Amazon has spent, but it would surely be much less than the £90m BT is spending, since it has bought Package F, with games from one Bank Holiday and one midweek rond.

While the Bank Holiday games could be spread out into as many as four time periods – e.g. kick-offs at 12pm, 3pm 5:30pm and 8pm – a further six games from the round would be played simultaneously with other fixtures. And even the most die-hard fan is unlikely to stay glued to their sofas for four consecutive matches.

With the midweek round, it’s again hard to see how a viewer can see more than two fixtures – one on Tuesday and one on Wednesday. The remainder will need to be played simultaneously.

In both cases, some less glamorous games will be included, so the rights fee should be lower – in the £50-60m range I would guess. That leaves the Premier League with perhaps £450m less over three seasons than previously.

As I said previously, when I mused on Amazon buying rights, I could envisage a sales push from Amazon with something like: “Buy a Fire TV stick this Christmas and get free access to Boxing Day football – only with Amazon.”

But this is a marketing challenge for Amazon. They have games on only three dates within the season. So they’re going to have to spend a lot on advertising to reach viewers for such a short period.

The Premier League was desperate to get a digital player like Amazon on board, because since there’s no obvious competitor to Sky or BT right now, they need deep-pocketed global players like Amazon to come in and shake things up (aka spend even more cash!). But if Amazon bid for the bigger packages, they didn’t go high enough, and global operators like them or Facebook really want global rights. Given the value of Premier League football, it’s probably still a better business model for the league to sell rights on a territory by territory basis. Sum of the parts is worth more than an Amazon whole.

That may not remain the case forever, but aside from the prestige in owning the rights, there has to be a business model where it makes sense for Amazon or another digital giant to buy these rights. And I’ve struggled to find one. That said, Facebook did bid for Indian Premier League rights. They didn’t win, but those rights might make more sense since India is probably still a growth market for Facebook. Is there anyone left in the UK who might use Facebook that isn’t using it? (It’s true that post Cambridge Analytica, a bigger issue for Facebook in the future might be retention of some of those users.)

I’m certain that next time around, we’ll get a different set of TV packages that makes more sense to more broadcasters and digital operators. I’ve argued all the way along that these were badly formulated and indeed were a misreading on the Premier League’s behalf.

I will be interested to see who gets mobile goal flash digital rights since those are yet to be allocated and might indeed be of value to a new player.

The Premier League probably looks jealously at the way the NFL can sell the same rights to multiple platforms. For example, Thursday night games next season will air on Fox TV, the NFL’s own NFL Network (which gets cross promotional branding on Fox), and Amazon who have renewed a previous deal. Now Amazon is reported to have spent perhaps $50m for the 2017 rights, so pocket change in the scheme of things, but it’s amazing that the NFL can sell the same games multiple times.

The NFL also repackages other games that it has “already sold.” While Sunday afternoon rights holders like CBS and Fox cover games in multiple territories, adhering to complicated rules about which fixtures have to be covered in which “local” market, nearly all the games are available to subscribers of DirecTV’s Sunday Ticket package. DirecTV obviously pays healthily for these rights – as do its subscribers.

Beyond that, NFL Network also offers Redzone (viewable in the UK on Sky Sports), which is ad-free coverage of all the afternoon’s fixtures, hopping from game to game as teams get closer to scoring. While the NFL owns NFL Network itself, it’s still effectively redirecting some viewers away from networks like CBS and Fox to its own network, where viewers are not exposed to those networks’ ads!

In some ways it’s remarkable that the NFL is able to do this, but American football is an in-demand product, and networks need it on their schedules. I’m sure that the Premier League would love to do something similar.

Premier League Rights Update

Yesterday evening came news that the bulk of the Premier League packages for 2019-2022 have been sold to the incumbents, Sky and BT. But revenues are actually down this time around.

Sky is paying less than it was previously for a package of 128 matches across the year, both in overall terms, and in the price per game that it pays. Indeed it has a handful more games this time around despite paying less. But that still gets it all the first picks and many of the second ones, and it includes the new Saturday night kick off package.

BT is also paying a little less for the package it currently does for the Saturday lunchtime games, although there are fewer of them this time around which means the price per game goes up.

Overall, with two rights packages still be finalised, total revenues are £4.464bn compared with a final figure of £5.1bn last time around.

The final two packages are still to be determined, with the Premier League saying that there are “multiple” bidders – for which I read that as meaning more than one.

BT is certainly one of these, and it’s conceivable that Amazon would be the other. There’s no real value in Sky buying more – it has enough to persuade subscribers of the value of its package.

But there is a massive problem with these packages, and I’m still really unclear about how the Premier League formulated them.

One package is made up of Bank Holiday fixtures, and a complete midweek round of the Premier League, while the other contains two complete rounds of the Premier League.

Those complete rounds are surely problematical for any bidder? As I said previously, the winning broadcaster gets only two real bites of the cherry for each round of the Premier League. That assumes that matches are split across a Tuesday and Wednesday. So whoever buys the rights has a very limited window to monetise them. The package that includes Bank Holiday games is a little more attractive, since they’re spread out. But the value per game to broadcasters has to be substantially lower than for any other package.

But I wonder if the real reason that these have not been sold yet is because broadcasters are valuing them lower than Premier League does? The Premier League does set a reserve. That’s precisely what the FT is reporting (£) based on its sources.

It’s still possible that Amazon would come in and buy a package:

“Buy a Fire TV stick this Christmas and get free access to Boxing Day football – only with Amazon.”

But digital rights holders would also want to spread those games out across a longer period, and ideally want global rights, not just UK rights.

There’s no way that the final packages raising anything close to the £600m or so that would at least equal what the Premier League achieved last time around.

Unquestionably, these two package were badly formulated by the Premier League. They somehow believed that they would attract digital players who would hand over their hundreds of millions unquestionably, without weighing up the true value of the opportunity. And that hasn’t happened.

Premier League TV Rights – 2019-2022

The new Premier League TV rights auction for the UK has just got under way, with bids due in at the end of January, and the results announced in early February. Such are the scale of these rights now, that the announcement tends to be made to accommodate the stock market. If a PLC is spending several billion pounds on something, this is “of note.”

Where do we stand, and where are we likely to go?

At first glance, there really doesn’t feel like an enormous growth left in the UK market. Last time around, the value of UK live rights rose a colossal 70%, from £3bn to £5.1bn!

This increase in cost didn’t come without consequences. Subscribers to both Sky and BT have seen increases in their subscriptions, while Sky in particular (who’s packages increase the most in value), has cut costs elsewhere, reducing some coverage – notably tennis.

But different players have different needs from Premier League football.

Sky

As the bid from 21st Century Fox for complete ownership of Sky continues to navigate regulatory hurdles, Rupert Murdoch himself is selling out to Disney. While the Disney deal itself will need to overcome any US regulatory concerns, the general feeling is that it will get through unscathed (While it shouldn’t involve the US President, Trump is reportedly more concerned about the future of Fox News than anything else, and Murdoch keeps ownership of that). Meanwhile, the prospect of Sky News being a Disney property rather than a 100% Murdoch owned, is probably more palatable to more people. The separation organisationally from the unsavoury practices at Fox News is probably helpful too. There perhaps remains a question of when the various deals go through, so that waving the Sky deal through before the details of the Disney deal have been finalised might be problematic.

But returning to the Premier League, for Sky the rights are an important – not to say critical – part of its overall offering. Sports also remain an important part of Disney’s offering.

ESPN has for many years been a substantial revenue generator, but of late it has began to suffer. So-called “cable cutters” don’t all want ESPN. It had been regularly bundled into all basic cable offerings, taking a substantial share of a household’s monthly cable bill, regardless of whether that household actually wanted to watch sport. As such, it became a cash cow. That’s still the case, but as younger subscribers choose their digital offerings in a piecemeal way – Netflix here, HBO Now there – ESPN was beginning to miss out. It was losing overall subscribers, and has of late announced a series of redundancies to cut costs.

In part to bolster that, Disney has picked up Fox’s regional sports networks as part of the Fox acquisition, qne they provide very solid ratings revenues.

The problem with all sports for broadcasters is that in large part, they are not actually owned by the networks. Every few years, the rights are put out to tender, and the rights owners tend to expect big increases.

That extends from the Premier League to the NFL, the IOC, the ICC, the NBA and so on. Sport has become disproportionately important because for the most part, the value is in live rights, and an audience that advertisers love being unable to skip the built-in advertising.

Sky needs the Premier League, and it has to pull out all the stops to maintain the crown jewels of the packages offered. But at some level there will be a red line beyond which it doesn’t make sense to bid.

BT

BT is in a slightly different position, as it built its TV offering as much as anything to support its broadband proposition. This has developed further when BT trumped Sky to buy Champions’ League and Europa League rights. Unlike previous minority rights holders of Premier League football, BT was clearly a serious player with serious cash available. By offering sport initially free, and later at a discount to its broadband customers, it was able to stem the flow to other broadband providers.

In TV terms, BT does still feels like a smaller player in the wider marketplace.

There may be a slight shift at BT now, as it develops a stronger TV offering built around IP delivery, but the company is really in the business of running wires and cables into your home.

Sky and BT Making Up

Interestingly, Sky and BT have recently reached an agreement to properly wholesale their packages to each others’ customers. While BT Sport has been available to Sky customers since launch, viewers had to deal separately with BT to view the channel on their Sky box. The new agreement will make it easier for Sky customers to add BT Sport to their existing Sky package, buying it directly through Sky. In return, BT will make available Sky’s Now TV offer via its own BT TV platform. That effectively provides a mechanism for BT to offer the full range of Sky Sports channels through its platform.

Commentators have suggested that the pair have reached this agreement in part to mitigate the chances of the pair outbidding one another in the upcoming auction. While I doubt they’d collude (which may be illegal anyway), it’s likely that the status quo would suit both parties just fine. The pair do potentially face some opposition however…

Sidenote: One curious consequence of the Disney takeover of Fox (and in turn Sky), is that BT currently has a deal with ESPN for much of its US sports programming. In essence this leaves Disney with at least a small foot in both camps.

The Packages

Note: This is based on published information. Precise details of first picks is likely to appear in the tender documents which aren’t ordinarily made publicly available.

Under this contract, we will be up from 168 matches to 200 of the 380 total Premier League fixtures being broadcast live on UK TV.

Previously, there were five packages of 28 games, and two packages of 14 games. BT won the rights to 28 Saturday 1730 fixtures, as well as a further 6 midweek matches and 8 Saturday matches. Sky won all the remaining fixtures.

This time around the seven packages are built somewhat differently, with Saturday evening primetime being added into the mix, as well as some intriguing midweek packages.

2019-2022 Packages
Package A: 32 matches on Saturdays at 12:30
Package B: 32 matches on Saturdays at 17:30
Package C: 24 matches on Sundays at 14:00 and eight matches on Saturdays at 19:45
Package D: 32 matches on Sundays at 16:30
Package E: 24 matches on Mondays at 20:00 or Fridays at 19:30/20:00 and eight matches on Sundays at 14:00
Package F: 20 matches from one Bank Holiday and one midweek fixture programme
Package G: 20 matches from two midweek fixture programmes

Packages A and B are the same as before, but increase from 28 to 32 games. Package C had previously been exclusively 2pm fixtures, but now has eight primetime Saturday night games.

Package D tends to be the most valuable package, in the past containing the majority of first picks (in other words, broadcasters can put the biggest matches in this slot, other considerations such as police advice notwithstanding).

Package E now gets some 14:00 Sunday games as well as Monday and Friday night football.

But, beyond an overall increase in fixtures and the Saturday night slot opening up, it’s packages E and F that see the biggest changes. Previously these were a mix of mid-week and Bank Holiday fixtures throughout the season. But under this auction they will account for four individual programmes. For example, when there’s a full midweek fixture list, all games are usually played on a Tuesday and Wednesday. But by offering rights to all these games in a given week, any one viewer can only really watch two of them, since multiple games take place simultaneously. So while there are 40 games in total across the two packages, there are potentially only 8 opportunities for a viewer to watch a game, with the other 32 happening during one of those 8 timeslots

So while it’s technically innovative, you wouldn’t expect this package to go for a vast amount of money compared with the others. It’s fewer games than other packages for starters. But it also seems squarely aimed at getting streaming services involved.

Both Sky and BT would be able to offer this choice – they both did or do similar things with Champions’ League group stages. But a decent number of the games are not fixtures a broadcaster might ordinarily choose to televise – think of those matches towards the end of an average edition of Match of the Day.

But if this is aimed at getting digital players involved, it would seem to require an awful lot of marketing for just 8 opportunities to watch on as few as 7 individual days.

The Premier League can only really show all its fixtures in midweek slots because there’s a blackout during Saturdays at 3pm to support the wider football world. But I wonder whether by 2022, we’ll see every Premier League game played outside the 3pm Saturday window? That would enable all matches to be shown live, and perhaps a 2pm Sunday slot having the majority of fixtures.

Potential New Entrants

A bit like the broadcasters, different digital groups have different reasons to use video. Are they looking to increase dwell time on their services, are they looking to grow their user numbers, or are they looking for something else altogether?

Sport isn’t out the question with streaming services, bringing with it loyal fans. But it also brings issues with having a robust technical backbone, and excludes those who don’t have solid broadband.

Furthermore, only UK rights are being sold. While the UK remains an important market for most of the big players, being able to offer streaming to multiple territories is preferable to global operators. The Premier League, of course, sees greater value in selling international rights in different territories to different operators rather than bundle them all together.

What is certain is that the Premier League is desperate for one or more of these companies to enter the market. If Sky and BT would be prepared to stick with the status quo and only offer modest increases in their bids compared with last time, it would take a third party entering to push bids upwards. The only possible existing TV group who might be persuaded would be Discovery via its Eurosport channel. But it’s just not clear that the rights make sense for that brand. While Discovery has spent big on the Olympics, it doesn’t have much of a UK footprint at all in football beyond various secondary UEFA and FIFA competitions.

Facebook

Facebook notably did bid for Indian Premier League cricket rights for a large number of territories, but the deal the IPL eventually did with Star India (also being sold to Disney as part of the Fox deal) included global streaming rights, so they lost out.

You wouldn’t count out Facebook from bidding for Premier League football, but the challenge for them is that these are UK rights. While Premier League football potentially offers increased dwell time on the platform, assuming that the games are broadcast free to viewers, there’s relatively little in it for Facebook in terms of gaining new subscribers.

However Facebook is investing in premium video, and they have money to burn, so a bid isn’t out of the question.

Google/YouTube

YouTube has bought sports rights in the past – cricket immediately springs to mind. Google is constantly evolving its offerings, with a rumoured reversioning of its music offering in both audio and video terms, due to be launched soon.

As with Facebook, Google doesn’t face any problems in being able to afford rights, but it’s not clear what it really gains for them. YouTube is already phenomenally successful, and Google’s reach is nearly complete.

Again, that doesn’t mean that they wouldn’t bid, it’s not entirely clear why they would.

Apple

Apple is also making a play to develop a premium video offering, but it hasn’t as yet entered the sports arena. It’s platform is much less developed in the UK, and if made available exclusively via Apple apps or devices, any bid would curtail audiences a bit.

It seems much less likely that Apple would bid compared with other digital players.

Amazon

Amazon may be interested. Their model is slightly different, and they’ve not yet achieved the prestige in the video marketplace that others have. They’re certainly jealous that Netflix has developed stronger video brands than they have. The recent acquisition of The Lord of the Rings rights shows their ambition in this area – spending $250m on the rights alone to make a series, before they spend a single cent on production.

Notably they have now bought a range of tennis rights, outbidding Sky for the men’s ATP tour rights, as well as buying US Open rights. However we should be careful here. The entire ATP rights package cost Amazon less than Sky pays for a single Premier League fixture.

Tennis feels like a toe in the water for Amazon. They also stream Thursday night NFL games – something Twitter did previously, but outside the US you may not have noticed (games happen after 1am local time in the UK, and 2am in central Europe). It should also be remembered that Thursday night NFL is the least valuable package, and Amazon shares the rights with CBS and NBC in broadcast.

Amazon certainly has the technology to offer streaming, both via its Amazon Prime Video platform, as well as Twitch, potentially allowing it to reach a younger audience.

As such, it feels the likeliest bidder of all the digital platforms, even if the strange nature of packages F and G don’t really seem to make sense for anybody.

Twitter

Twitter has played with live streaming, offering everything from an alternative election night programme with Buzzfeed, to eSports and, as mentioned above, some NFL games last season.

Of all the digital players, it feels like Twitter perhaps has the most to gain in terms of getting new sign-ups from something like this. However it’s not trivial to get Twitter video onto your TV set.

As a company, Twitter is a scale lower than other digital businesses (see also Snapchat, who I’ve not even considered here), and so cost may be an issue.

Netflix

This feels to be the least likely digital bidder. Their business has not been built on sport, and as mentioned above, the real problem with sport is its lack of repeat-ability. If you’re paying £10m+ for a property, then they want to sweat that asset over a number of years. The value of a live match is a one-time thing, and really doesn’t seem to fit their model.

Outcome

We’ll find out the answers to all these questions in a couple of months’ time. Would the Premier League leave Sky and/or BT without games or a severely reduced offering? If the money was right, then yes. How would pubs show games “broadcast” on Twitter? Someone’s phone hooked up to a TV set?

Just because these businesses have the cash, it doesn’t mean that it makes sense for them to bid for rights. There has to be a reason. It might be adding value to a wider package such as Amazon Prime; it might be growing the number of users, or increasing a site’s dwell time. But many of these services are doing quite nicely already.

I can’t see BT and Sky increasing their bids at anything near the level they’ve previously managed. The value just isn’t there. Sky has managed to diversify its offering with originals and exclusive deals with providers like HBO. Renewing that HBO deal feels almost as important as doing another Premier League deal.

In the end, it’s probably best not to second guess these things too much. All will become clearer in February when consumers will discover just how many subscriptions they need to get the full range of Premier League football on television.

Facebook, Amazon and the Premier League

It’s nearly time for the money-go-round… sorry, merry-go-round, that is the Premier League rights auction for seasons 2019/20-2021/22. We’ve just started the second season of the current deal where Sky and BT between them have spent £5.1bn for the current round of rights. Recall that last time around, this represented a colossal 71% increase in revenues.

That money, allied with ever-increasing overseas TV rights, fuels the UK game. But there were questions about how much further rights could increase next time around. Sky and BT represent the only “broadcasters” who are likely to bid next time around, and assuming that each is broadly happy with its lot, you wouldn’t expect rights to increase substantially.

Indeed, it seems as though the current set of rights have caused some real pain to the broadcasters. Sky has broadly speaking cut back its sports coverage, losing men’s tennis, and reducing rugby union coverage. Anecdotally, it seems that more coverage is coming from Sky’s studios rather than sending production teams to events.

One way or another, Sky has tried to avoid massive increases to consumers, although prices are going up.

So if Sky and BT are fairly maxed out, how do Premier League clubs get some big increases next time around?

Today The Guardian reports that Manchester United vice-chairman Ed Woodward says that Amazon and Facebook will get into the game.

As far as everyone is concerned, these companies bring untold wealth. They could be game-changers – pardon the pun.

Well of course Woodward would say that. And I’m sure that Amazon, Facebook, Google and Apple will run the numbers. But at over £10m a match under the current contract, they’d need a compelling case. With the possible exception of The Crown, that blows all top TV dramas out of the water in terms of costs.

A lot has been made of Amazon taking on ATP Men’s Tennis in the UK from next year. They’re paying around £10m – the same price as a single Premier League match – for a year’s worth of tennis. Sky is said to have wanted to pay less than last time around, so it was to all intents and purposes giving up on the sport. They’d already dropped their US Open coverage.

For Amazon, tennis is a bit of a trial. Perhaps it’ll get them new Prime memberships, or make current members happier. But it’s not a massive cost. It’s not a multi-billion, multi-year commitment.

That’s not to say that one of GAFA won’t buy rights, but that’s a much bigger step. And what does that really get you?

All of this is before considering whether every football-loving household in the UK has enough internet bandwidth to support a live HD (or 4K) stream.

I could be wrong. But I’m not convinced just yet.

Free to Air Cricket

Today brings some interesting news, with the ECB actually allowing some free-to-air cricket on TV screens in the future. The BBC has done a deal to see the return of cricket to its channels for the first time since 1999.

You will recall that in 1998, Channel 4 secured the rights to most international cricket, notably including Test cricket. One Test was aired on Sky, who until that point had made do with smaller competitions and notably overseas tours.

In many respects Channel 4 really improved TV coverage, and despite some awkward business of trying to show both cricket and Channel 4 Racing on the same afternoons (with Film 4 often being used as an overspill channel), they were very successful.

In its final season Channel 4 saw a peak audience of over 7m watch England win the 2005 Ashes. Thousands turned out for an open-top bus parade that ended in Trafalgar Square.

Cricket was on top.

And then, for the most part, it disappeared from our screens. Sky had outbid Channel 4 for exclusive coverage of all domestic cricket. The ECB had taken Sky’s cash ahead of any interest in keeping the game alive.

The ECB continued to work exclusively with Sky renewing deals right through until 2019.

The only free-to-air cricket that appeared on our screens were Channel 5’s highlights packages and some IPL cricket on ITV4 (Which has since also moved to Sky). There’d be an occasional tourist game against Scotland on the red button but that was it.

Earlier this year, the BBC did show highlights of the ICC Trophy, and we have also seen some in-game digital clips appear on the BBC website. But for live cricket, you “only” had the unparalleled Test Match Special.

In the meantime participation in cricket had fallen, and most counties were now propped up financially by the ECB.

T20 had come along, and while the riches of the Indian Premier League might seem impossible to replicate in Britain, the success of Australia’s Big Bash seemed distinctly replicable.

That tournament runs for 35 nights in a row on free-to-air Channel Ten, garnering significant audiences for its city-based franchise structure. (It should be noted that Channel Ten is suffering severe financial pressures currently, and either rival Channel Nine will win the rights next time around, or some of the games may go subscription only).

So the ECB has now conjoured up a city-based franchise format, meaning that some big counties will miss out and need to be paid off. That also means that the new format will be in addition to the existing T20 Blast series which will continue to be competed at county level.

And then of course there are the existing four day County Championship games as well as one day competitions, all of which need to be squeezed into the cricket season.

Add into the mix central contracts, extended period of Big Bash, IPL, one-day internationals, T20 internationals and Tests, all of this means that big names are rarely seen in their “home” counties.

Still, that’s the mess of contemporary cricket.

Which all brings us to today’s news that the BBC has done a deal for cricket with the ECB. It doesn’t start until 2020, because Sky still has exclusivity until 2019. But the BBC will be showing:

  • Two England men’s home T20s (of a total of 4-6?)
  • One England women’s home T20
  • 10 matches from the domestic men’s T20 city-based franchise series, including the final (out of a total of 36 matches, all of which will be on Sky)
  • Up to 8 matchs from the women’s T20 city-based franchise series including the final
  • Highlights of home Tests, One Day Internationals and T20 Internationals
  • Highlights of women’s internationals
  • Digital clips of men and women’s internationals, plus County Championship, One-Day Cup and T20 matches
  • Test Match Special wins radio rights to all competitions through until 2024

So the live coverage will exclusively be T20 formats, with other competitions receiving highlights treatment.

Sky has regained rights to everything else, including exclusive live coverage of home Tests. BT Sport, which is thought to have bid, has not come away with any rights. Notably, it has bought rights to Australian cricket meaning that it will be the exclusive rights holder to the Ashes Tour this winter (assuming the massive pay dispute there is sorted out).

In total, the deal is said to be worth £1.1bn over five years – quite a jump from previous deals, with Sky’s last deal £260m over four years, and then extended a further two. That said, there wasn’t significant growth over the last two deals. This all suggests Sky sees a great opportunity in the new T20 competition.

Still, this all goes to show that getting eyeballs in front of your sport is essential if you want to see any significant growth in it. And perhaps other sports will learn from this.

The ECB has learnt the hard way.

Sky Sports Revamp

Sky Sports is reportedly getting a bit of a makeover, losing the numbered channels currently known as Sky Sports 1-5, and instead gaining sports-specific channels.

Currently the channels are roughly being used as follows:

Sky Sports 1 – Football
Sky Sports 2 – Cricket, Rugby, Football
Sky Sports 3 – Football, Tennis
Sky Sports 4 – Golf
Sky Sports 5 – Football
Sky Sports News
Sky Sports F1 – F1
Sky Sports Mix – (Available on cheaper non-sports Sky tiers) Simulcast of one of the above, Dutch/Spanish Football or smaller sports like Netball, Drone Flying etc.

It sounds like this list is going to be rationalised into:

Sky Sports Football 1/Premier League
Sky Sports Football 2/Football League/Spanish etc.
Sky Sports Cricket
Sky Sports Golf
Sky Sports Arena (Including Rugby and Tennis)
Sky Sports F1
Sky Sports News
Sky Sports Mix (Assuming this continues)

In some respects, this simplifies things a little. It seems that what Sky wants to be able to do is offer a cheaper entry to its sports packages. Recall that BT Sport retail its sports offerings from as little as £5 a month for a streaming package, and £7.50 for those with Sky (and a BT Broadband internet connection).

Currently the cheapest way of getting Sky Sports on TV is £49.50 a month (based on taking the cheapest Sky Original Bundle before adding the full Sky Sports pack to it, with Sky only offering packages with their new Sky Q box). According to The Guardian, this will allow Sky to charge £18 for its cheapest partial sports offering.

But I do foresee a few problems with this plan.

First of all, it seems likely that the cheapest offering will not be football, rights costs for which have shot up. I would anticipate that either cricket or golf will be the cheapest offerings.

Then there’s the issue of sustaining full channels of some of these sports around the clock year long. Sky Sports F1 is something of a joke outside the season, and is largely filled with filler outside of race weekends. Quite why it didn’t become a broader motor-sport channel has never been obvious to me.

You also have the issue of major sports that don’t fit in. What about Rugby League or NFL, both of which have significant followings and carriage deals with Sky.

But more to the point, as someone who takes the full Sky Sports package, I would love to pay less and drop sports I’m not interested in. Namely Sky Sports Golf and the misery that is Sky Sports F1 (Seriously, why would I pay to hear Martin Brundle?).

At time of writing, it’s not clear when these new packages will go live, and I’ve not seen the price breakdowns across the different packages.

There’s also the not insignificant matter of third parties who currently get Sky Sports 1 and 2 on a wholesale basis. Although formal “must-offer” conditions have previously been removed, Ofcom has said that it would take a keen interest in any move that removed Premier League football from other platforms.

It would seem like that Sky would continue to retail football. But nearly all Sky’s major sport appears on those Sky Sports 1 and 2 currently – so even if golf usually finds its home on Sky Sports 4, it gets a bump up during, say, The Masters or the Ryder Cup. Lions rugby is on Sky Sports 1 right now, and next week England’s Test series against South Africa will start on Sky Sports 2.

While the Premier League channel might be one, what would the second be? At the moment, if I subscribe to, say, Sky Sports on BT TV, I can watch Premier League football, Test cricket and Lions rugby. What happens in the future? The easy answer would be for Sky to allow its channels to be retailed more fully on other platforms. (I did also wonder if the recent news about Sky and Virgin sharing Sky’s targeted advertising technology might mean that Sky Atlantic was made available to Virgin Media homes?). But we shall have to wait and see.

With the Fox takeover of Sky still in the balance following yesterday’s news that it’s being referred to the competition authorities, it will be interesting to see how Sky plays this.

BT/UEFA Rights Deal

08 March 2009

Last week, BT Chief Executive Gavin Patterson was reported as saying that “rampant inflation in sports rights” had to end.

Today we learn that BT is going to pay £394m a season for UEFA Champions’ League and Europa League rights from the 2018/19 season, up from £299m a season under the previous agreement.

By my calculation, that’s a 31.8% increase over three years.

What was that about “rampant inflation” again?

BT’s new deal also includes all rights to highlights, meaning that there won’t be any TV highlights on ITV. Instead, BT will share free highlights in social media.

Hmm.

And of course UEFA is going to an 1800/2000 GMT/BST structure on Champions’ League match days, meaning lots of UK residents will still be at work or commuting while matches are taking place, as already happens with the Europa League. Oh good.

Prior to this deal being announced there had been lots of rumours in the press that UEFA advertisers were unhappy with the loss of free-to-air coverage.

One estimate suggests that being a tier one partner of the Champions’ League costs $70m. There are eight main sponsors of the Champions’ League (Heineken, Mastercard, Gazprom, Sony, Nissan, PepsiCo, Adidas and Unicredit), and if we assume that they all pay the same, that’s $560m a year in sponsorship revenue (Approx £460m).

UEFA’s calculation is that £100m more for UK rights is worth it, set against £460m of pan-European sponsorship revenues, and any reduced reach for those advertisers within the UK market for their premier competition.

This feels like a very short-term deal.

There is a quote in BT’s press release that says:

BT will enhance its social media coverage to reach new audiences, by making clips, weekly highlights, UEFA’s magazine show, and both finals available for free on social media. BT streamed both finals last year on YouTube for the first time, taking the number of people who watched BT’s live coverage of the finals to more than twelve million. The company will also seek to bring the best of the action to its large mobile customer base.

That suggests that only the final will be made available free. Everything else will be behind a BT paywall. No BT Showcase any more. There’s the possibility of BT sub-licencing some matches to another channel, but absolutely no guarantee they will.

I’ve examined the 12m number before, and it is to be regarded very carefully indeed. First of all 12m is not 12m different people – it’s the sum of the Champions’ League audience and Europa League audience. Football fans being who they are, that’s a lot of the same people who watched both matches.

And as I mentioned in the previous article, BT is using “reach” rather than the more usual “average audience” to get as big a number as they can. Last week 3.45m watched a one-sided FA Cup replay between Man City and Huddersfield. 3.45m means that at an average of 3.45m watched the entire broadcast from 1930-2200. Audiences aren’t constant, and once Man City were well ahead, audiences drifted away to other programmes. Other people turn on late and perhaps watch the last half an hour. Overall, at any given point in the entire match 3.45m were watching. But BT is using a reach number – the number of different people who watched any of the game. This is necessarily bigger. And it’s not a number that would normally be bandied around by a broadcaster when talking about viewership of their shows.

Finally, without a great deal more information we can’t be sure what the 3m YouTube component of the audience really means. First of all, the Champions’ League final had 1.8m views, meaning the Europa League must have had about 1.2m. YouTube registers a view when someone watches as little 30 seconds. So this almost certainly doesn’t mean 1.8m or 1.2m watched the entire match. And again, many of the same fans will have watched both matches.

Digging into BT’s YouTube channel doesn’t seem to surface the complete live videos any longer. There are just highlights packages. There are a couple of short videos with several hundred thousand views each, and it’s not clear if these were once the live streams (I suspect they may have been), or just incredibly popular promo videos, but either way, we need to be careful what we’re counting. Interestingly, the CL promo has around 470,000 views while the Europa League promo has over 600,000 views. If they were the live streams, then that doesn’t total 3m.

To be fair to BT for one moment, a single YouTube view does not equal a single viewer. Many will have been streaming to smart TVs with sizeable numbers potentially watching. But online video views can be a murky business, and the methodology is completely different to the BARB measurement for TV, meaning combined audiences figures should be treated with tremendous caution.

I suppose in the end, I find it incredibly disappointing that either a single match isn’t made available to ITV, C4 or C5, and that highlights are removed from TV altogether. Saying that you’ll make highlights available in social media is a nice addition, but shouldn’t replace a broadcast channel. Many older viewers in particular will struggle to see footage now. It’s the elderly and poorest in society who don’t have access to the internet for streaming and the devices necessary to enable them.

UEFA clearly doesn’t care about those viewers. BT will pay more for complete exclusivity, which they now have. And if you either can’t afford BT, or don’t have the means or ability to watch their social streams, then tough luck. No European football for you.

If this were any other sport – I’m looking at you, cricket – you’d question the ramifications for the future of the sport by striking this kind of lockout deal. But this is football, and the major competitions are always likely to be important.

The only tiny bit of hope is that Karen Bradley, Culture Secretary, recently talked of “future proofing” listed events like the World Cup. Would free-to-air Champions’ League highlights ever be included in that list?

Incidentally, if you were in Belgium, Germany or Italy, you’d be able to see, at minimum, the finals of the Champions’ League or Europa League of a home club reached the final, because of rules regarding listed events in those countries.

A 32% increase in fees? This time next year, the next Premier League TV deal will be being announced. I bet over in Gloucester Place, the Premier League is rubbing its hands in anticipation of next year, unless BT and Sky reach some kind of appeasement in respect of their relative positions in the TV football marketplace.

More “rampant inflation” to come?

[Later] An interesting piece in The Guardian about BT’s need to win these rights following a fairly miserable year for them. Although I would make a couple of points:

  • Only in football could a 32% increase in rights fees be considered to have cooled a little. BT drove the last round of increased fees by making a knockout bid. This time, they’ve still paid a substantial premium at a time when Sky “…did not look to submit a knockout Champions League bid.”
  • The Guardian piece notes that Sky is paying £11m a game under its current deal compared with £1.1m a game for BT’s UEFA deal. But that’s not really a fair comparison because Sky’s Premier League games are not all played simultaneously. In the group stages there are sixteen matches per round, spread over two nights. Even with two timeslots a night, that means at least three out of four matches will be behind a red button. And you can only watch one match at a time. Even watching the “goals” show, it means that a Tuesday evening is costing £8.8m for BT in rights fees. Sky only schedules a couple of simultaneous games on the final day of the season if there’s something to be played for. Yes, there’s “Super Sunday”, but you can watch both games.

Sky/Discovery Carriage Dispute

Channel carriage disputes are relatively rare in the UK, but we’re in for a sizeable one right now, with Discovery publicly stepping forward and saying that from the end of this month, Sky subscribers may no longer get access to a Discovery channels. It seems that the two companies have been unable to reach agreement on how much Sky pays Discovery from the subscription fees it collects from viewers.

Sky says that it has overpaid for Discovery’s channels for years.

Discovery says that it is now paid less than it was ten years ago. They claim Sky is playing hardball because of its Premier League rights inflation.

The whole dispute has become very public, very quickly. I noticed that during the BBC’s reporting of a Venus/Serena final in the Australian Open at the weekend, there was already a crawl along the Eurosport footage they’d lifted.

Discovery has set up a Keep Discovery website, and their social media outlets are alerting followers to the dispute. This is straight out of the US-playbook, where such tactics are common and often go public. Sometimes they’re quickly resolved; but other times they go on for years (In Los Angeles there is ongoing dispute between Time Warner Cable who own SportsNet LA with exclusive LA Dodgers coverage, and the major cable companies who actually reach customers in the area. As a result, most locals have been unable to watch local basseball coverage for at least three seasons now.)

Meanwhile, Sky has also added a section to its customer service website.

While I’m not sure how long discussions have been going on, this must have been a while. I know this because sometime around October last year, I completed a Sky customer research survey in which many of the questions seemed to be about how much I valued Discovery’s channels, and whether I’d continue as a customer if I lost access to their channels.

A few thoughts on this:

  • I’m sure Sky is trying to save cash after its record breaking Premier League rights bid. While they’ve not passed full costs onto consumers, they’ve clearly cut back in places, reducing coverage of some sports, and cutting overheads where possible. They do continue to invest in original programming however.
  • According to BARB, in December 2016 the Discovery Group had a 1.69% share of viewing. But this includes Quest, a free-to-air channel which is potentially unaffected by this dispute.
  • Discovery is clearly investing in Europe. It took full ownership of Eurosport in 2015, and has also bought a large swathe of exclusive European Olympic rights beginning in 2018 in some territories.
  • Sky announced a 9% fall in operating profits today as a direct result of their increased Premier League costs.
  • This is not just a UK affair. The disagreement extends to Sky Deutchland as well.
  • Eurosport calls itself the “Home of Cycling” and it does indeed carry vastly more cycling coverage than any other channel. This ironically means that the Team Sky cycling team (fully owned by Sky) will be largely invisible to Sky TV viewers post the 31st January if the dispute is not resolved. At least until the Tour de France which is also carried on ITV4.
  • My favourite FAQ on the Sky site is: “I regularly watched Eurosport. What can I watch on Sky instead?” To which the answer seems to be Premier League football, rugby union, cricket and rugby league. None of which is much use if I actually wanted to watch cycling, downhill skiing, tennis or snooker. Sky Sports and Eurosport UK have almost no sporting crossovers!
  • When live sports are affected, it’s not uncommon for viewers to look for “alternatives.” These aren’t always legal. If your favourite sport goes off-air, and you’re not willing to change TV provider, that mate who’s mentioned how easy it is to set up a Kodi box and pull in illegal feeds, might open your eyes to how easy piracy is. And that doesn’t help any sports TV channels. Why pay if you can get them free?*

In the meantime, do I pay £19.99 for a year’s subscription to Eurosport Player? It’s on sale until 31st January when the price reverts to £59.99? It works with Chromecast. Paying would be hedging my bets. And if the channels do disappear, then a conversation with Sky’s retention team might see me recouping that cost.

* I’m not advocating this, but it must surely be a temptation.