Selling the game

It’s been a bad news week this week if you are a fan of what many people call the national game of England, that being football (or soccer for my American readers).

The TV rights to screen games from our biggest league ‘The Premiership’ have been sold to Sky and BT for a staggering £5.136bn, which is 71% above the amount they paid for TV rights last time they were sold. Here is a news story about this development:

http://www.bbc.co.uk/news/business-31379128

The clubs in the leagues are probably rubbing their hands together, as this sale of rights means more money will filter through to the clubs, which will make their balance sheets look healthier give them capital to build stadiums, ability to buy new players and more chances to secure loans or credit.

I think the clubs and the league will be the only winners though. To access football matches legally in the UK through Sky and BT, you either have to have a paid subscription or pay for their other products and services. Both Sky and BT are businesses and need to make money from these deals, so that leaves the fans in a bad place.

The Rich get richer

I’m sure the money the clubs make through these deals will keep some fans happy though, as some will use the increased revenues to buy big name players to excite and entertain their fans. These players will get paid a ridiculous amount of money and may or may not bring success to their club. Whilst the wages of the super rich footballers I’m sure will increase with this deal, I’m sure the average earnings of the fans that pay their money to support them won’t increase at anywhere near the same rate.

The problem with the TV rights deal is that it starts a domino effect on the money earned and spent by those in the game, as it filters from Sky to the Premier League, then to the clubs and then to the players. People are already speculating that this TV deal may be the catalyst for the record transfer fee and wages for a player to be broken again. Even though the money coming in may be going up, the costs for the TV providers and the clubs I think will be going up significantly in the next 4 years because of it.

Business

Sky and BT will need to claw their outlay back and this is where I think the fans are going to be hit in the pocket. The easiest way for them to do this is by increasing the costs for their subscriptions and to increase the lengths of contracts you have to commit to in order to watch the games.

The next way they will claw their outlay back is through advertising. I think we can expect to see more on screen advertising during games and coverage, more paid for advertising on their online and social media streams, then finally probably more advert breaks or longer advert breaks in the build up, half time and post match.

Open Letter

Last year I blogged my ‘Open Letter’ to the football world which can be seen here:

https://adamsibley.wordpress.com/2014/12/16/open-letter-to-football-teams-players-staff-and-tv-companies-that-screen-football-in-the-uk/

Following on from this weeks news, I think this problem that I blogged about last year is only going to get worse. Sky and BT will be more desperate than ever for more advertisers and higher spending advertisers, so all I can see is betting adverts around football increasing.

Aggressive advertising

More betting adverts, more aggressive betting advertising and closer links between TV companies and betting companies will only see more people betting on football, which I think is a problem. Again (as I did in my blog last year) I stress that I am not anti-betting but I think for a good percentage of people that an aggressive advertising assault encouraging them to bet, could lead them in to financial problems and addictions.

We need to remember that it’s the betting companies that make the most from gambling, not the customers. Betting companies, like Sky and BT need to make a profit and for betting companies they will have to make more money to afford price hikes in advertising costs.

Pressure

With more at stake than ever for Sky and BT the pressure to make more money has been increased. The boards and shareholders will want to see returns on their investments and I am sure if these deals aren’t as successful for them as they had hoped, that it could have massive implications on their companies and their staff.

Inflated bubble

To fund what is becoming an ever over inflated bubble it will be the fans that lose out. I think for long-term success it is important to get as many people watching the game as possible, but all I can see long term is people turning away from the game. It won’t happen overnight but if we continue at this rate for the next 20 years, I dread to think what the sport will be like.

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