Viewing figures for Premier League football on Sky TV dropped 14% during last season, according to The Times. The fall has been attributed to live streaming of matches, some of which is illegal. But it seems unlikely to be the only contributory factor.
I was a full-package subscriber to Sky until BT Sport came along with a bid of £960 million to screen 42 games a season. The cost of my Sky package went up with fewer games to view. Sky assumed it could bid for the rights on the expectation that customers would continue to pay without a second thought. What made it worse was that by just quitting the sports package the remaining entertainment package’s cost was increased, so the saving was not as great as I would have expected. So I quit the Sky package entirely and purchased Netflix. I must now watch the BBC’s Match of the Day to see any EPL football.
My experience in running betting shops means I have seen what a bidding war for TV rights can do to price. The horse race betting sector used to have SIS, then Turf TV, then RMG and now The Racing Partnership. Four suppliers. The cost for the betting shop has escalated beyond the value of the product. So much so. that only William Hill seems to have purchased the entire product range. The result is less service to the betting shop punter, less coverage of horse racing, and a declining interest in the sport.
Football could have learned from this lesson but chose not to. It went down the very same path and this year there was no terrestrial coverage of the Champions League final. Viewers had to pay to view on BT Sport. According to BT, of the 6.5 million that watched the Champions League final 4.4 million watched it on TV with 2.1 million on digital platforms.
Enders Analysis told The Times live streaming could be “catastrophic” for Sky and BT where users can use Sky Go or the BT Sport app. Illegally streamed services are also becoming mainstream as younger viewers more familiar with technology have no compunction about using pirate services. The quality may not be as good, but at least they are saving £60 per month.
Televised coverage of sport creates betting opportunities, so this trend should be of concern to the sports betting business in the UK. Rising inflation and low wage settlements is causing a consumer squeeze. Unlike food and lodging, pay per view televised sports channels are not a necessity. Football’s golden harvest in media rights may be coming to an end.
The Competition and Markets Authority on the front page of its website states: We work to promote competition for the benefit of consumers, both within and outside the UK. Our aim is to make markets work well for consumers, businesses and the economy.
Competition for TV rights in both football and horse racing is working very well for the seller of those rights as companies bid up the price. But, let us be frank, the consumer (and in this context I refer to the viewer) is substantially worse off. Indeed, this is a case of competition law working against the consumers’ interests.