Undoubtedly the biggest broadcast rights story this month has been the £5.1 billion sale of the Premier League rights to Sky and BT, however there have been two other stories relating to sports broadcasting which have also generated significant interest. These are that Sky has renewed their English Cricket rights until 2019 and the 6 Nations committee has suggested that the tournament’s rights could be sold to a satellite broadcaster.
Broadcast rights have always generated an enormous amount interest as it’s a massively emotive subject. Many believe that everyone has right to watch the biggest sporting occasions on terrestrial television without having to pay any subscription fees. This is why the ‘crown jewel’ events are protected under the 1996 Broadcasting Act (Olympics, World Cup & European Championship finals, English and Scottish FA Cup finals, Grand National & Derby, Wimbledon finals, Rugby World Cup final, Rugby League’s Challenge Cup final). We don’t subscribe to this 20 year old protectionist legislation. We live in a very different world to 1996, media has fragmented so much that we are now struggling to distinguish the boundaries between the traditional broadcaster and new media channels. So to bind the whole industry with this outdated policy seems archaic. The fresh and innovative approach that the satellite broadcasters have introduced have enhanced the viewer’s experience and made BBC and ITV up their game to the benefit of all viewers.
However we are not instantly advocating that all sport should leave terrestrial channels, far from it. The reality is that the satellite broadcasters will have deeper pockets than their terrestrial counterparts so, if left completely to the open market, you would assume that eventually ITV and BBC will be left with little live sport. However the question should be more than simple economics, rights holders need to define their long term objectives prior to deciding on their broadcast partners.
In the case of the RFU and ECB, the sentiment of their mission statements is the same; to grow participation and interest in the game, with key metrics being the number of people playing regularly. So when you analyse Sky’s cricket broadcast rights, which began in 2005, against participation numbers it reveals a worrying trend. Average live viewing figures for a home England test match are around 670,000, peaking (during the last home Ashes series) at 1.3m. Benchmarking this against regular participation of the sport (at least once a month), according to Sport England between 2006 and 2014 the number fell by 13.5%.
When you compare this to English rugby its draws a slightly different picture. The annual blue riband event (The 6 Nations) is still available on terrestrial TV. Average viewing figures for an England match will be 5-6 million, with the recent England v Wales match attracting a peak audience of 9 million viewers. Regular participation (again defined by Sport England) between 2006 and 2014 fell by 4%. Whilst this is still a worrying figure it highlights the importance of a terrestrial television platform in generating interest in the game. You could argue that had the RFU and Premier Rugby not sold the autumn internationals, Aviva Premiership and European Champions Cup rights to satellite broadcasters (thus increasing exposure of the sport outside of the February/ March 6 Nations window) this 4% drop may well have been reversed into an increase.
Put this into the context of the recent League of Legends final (a multiplayer online battle arena video game) which attracted a global live streaming audience of 32 million. This figure highlights a trend where gamers have the ability to earn hundreds of thousands of dollars as this entertainment genre grows at an outstanding pace. This should worry sports administrators as there are plenty of leisure options which can and will attract the potential next generation of sportsmen and women.
Sports rights holders argue that the incremental satellite broadcast revenue filters down to the grassroots of the game thereby benefitting player recruitment. However, we believe that consistently embarking on a short term strategy of chasing the money is counterproductive to the long term growth of the sport. What a terrestrial television platform provides is regular exposure to large television audiences, engaging the occasional fan which will gradually increase the numbers interested in the game. This, in turn, will increase participation leading to higher sales of match tickets, merchandise and return to their sponsors (justifying increases in rights fees), thereby delivering against the long term economic objectives for the rights holder.
To further highlight the ECB’s short term-ism we would like to share an example from a few years ago. Whilst representing one of the UK’s biggest, young adult targeted, FMCG brands we were working on a major new cricketing initiative with the ECB which, at the time, was quite revolutionary. It would have exposed the sport to a completely new demographic through this brand’s marketing power. Sadly the initiative failed late in the process due to the final fee proposal being slightly short of the ECB target. Relative to the ECB’s total annual commercial income, this was a small amount of money however denied them access to a very dynamic new consumer/player base. It was a great shame that they were unable to see the potential benefits of having one of the UK’s biggest FMCG brand’s as a partner compared to their ‘usual’ financial services sponsors, however it typified their approach; short term financial incentives speak louder than opening up the sport to a younger, more dynamic audience.
The rationale behind the extraordinarily high value of the Premier League rights sale is relatively simple; football rights (be it Premier League or Champions League) are the foundation to the wider communication packages battle. Whether or not the figures committed, particularly by Sky, are justifiable or sustainable will be judged in time, however what does seem obvious is that these costs will ultimately be passed onto the consumer. This would appear to provide an opportunity for other sports, such as rugby and cricket, to pursue a different strategy whereby fans don’t have to pay a premium to enjoy the sport making engagement and, ultimately, participation easier. We live in a world where hitting this month’s financial target is paramount for most organisations. However, given the governance principles of the RFU and ECB they are able to take a longer term view and ensure they reverse the participation slide guaranteeing the long term stability of their sport, not just for the economics but, more importantly, for the health and wellbeing of future generations.
So whilst we applaud much of what the satellite broadcasters, Sky particularly, have achieved over the last 20 years we implore the 6 Nations, through the RFU, to take a longer term view of their broadcast options before consigning the tournament to a passionate, knowledgeable and engaged but, ultimately, small audience.