ESPN Gets The Premier League – Confusion Reigns

By on Jun 23, 2009 in English League Football, Finance, Latest | 1 comment

After a weekend of bidding, and to absolutely no-one’s surprise, the television packages for Premier League football which had been by Setanta have been purchased by the American-owned sports company ESPN. The Premier League had been in something of a hurry to get Setanta out of the way, to the extent that it is rumoured to have recently been lobbying the EU competition commission to get rid of the rules that they put in place specifically to deal with the sort of stranglehold that Sky has over British sport. Viewers will have to play a game of wait and see over how they will be able to view these matches (46 for the 2009/10 season and 23 matches per season thereafter) – the new channel will go onto Sky, but may also be available on BT Vision, Virgin Media and Freeview (through an encryption card).

What happens to many of the rest of the packages that Setanta currently hold remains up in the air. The SPL seems to have already struck a deal with Sky worth around three-quarters of the amount that Setanta had been paying. ITV are said to have an option to buy up England’s home friendly matches at £2m per match if the company goes into administration, but nothing has yet been said about the FA Cup and the Blue Square Premier. For the time being, the FA and the Football Conference seem to be biting their lips and hoping amongst hopes that Setanta manage to pull through. Whether this can happen or not remains to be seen. Setanta continues to trade for the time being, but without the pull of the Premier League and the SPL it is questionable whether they will be able to continue to trade. Ultimately, the big question is this – who on earth would take on a Setanta subscription now?

The Blue Square Premier have been concerned about the possible collapse of Setanta for a few weeks now. On the ninth of July, director John Ledger said, “Clubs might have had advice not to budget for that money, but I’m sure some clubs think well there is £70,000 guaranteed. Also on top of this people do get £8,000 for a home game and £3,000 for an away game, and it’s another couple of players for your squad”. The problem isn’t so much the collapse of the television company – it’s the fact that the clubs are already likely to have spent money that they haven’t received. Football clubs in spending money that they haven’t got shock. The situation is reminiscent of the collapse of ITV Digital in 2002, when a number of clubs, critically wounded after spending money promised to them by the subscription television channel, went into administration after the money wasn’t forthcoming and the Football League had to sign a new deal for a fraction of what they had been promised by ITV Digital with Sky.

As was noted on here before, there will be no winners as the result of the collapse of Setanta. The fundamental problem with their busness model was obvious. Ninety per cent of the subscriber base that they had already had Sky subscriptions. A significant number of Sky subscribers, therefore, didn’t want to pay again for more live televised football. On the other hand, however, Setanta couldn’t raise enough subscribers from elsewhere. It seems unlikely that ESPN will try and follow the same business model as Setanta, since this model has been seen to fail. Had the competition commission actually brought in rules that effectively challenged Sky rather than paying lip service to the idea of competition while still allowing them to dominate the market place in effect, none of this would have happened.

Two equally reasonably priced television packages would have provided the competition that the regulators would like to see. Until the regulators have the nerve to face Sky down (and there still doesn’t seem to be the political will to do this), any competitor to them will continue to be seen as inferior and we already know that the Premier League would rather have a Sky monopoly, charging whatever they can get away with. After all, that is the business model that the Premier League itself follows.

Share Button

    1 Comment

  1. It’s not beyond the realms of possibility that ESPN will buy Setanta. They very nearly did so earlier in the season until Setanta lost out on the additional Premier League package for 2010 onwards.

    However, now that they have gone into administration there may not be much left to buy once the rights start getting handed back to the original holders. All that will be left are the channels themselves which ESPN may want to snap up them up so as to avoid negotiating new carriage rates with Sky, Virgin et al.

    Either way it looks grim for the BSP and Setanta’s 200 staff.

    duffman

    June 23, 2009

Post a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>