A number of months ago I examined Premier League broadcasting rights and the costs that consumers face when watching live football. For those unfamiliar with the piece, I questioned whether consumers were better off following an agreement between the Premier League and European Commission a decade ago to end Sky Sports’ monopoly coverage of all live English Premier League matches.
The Guardian recently reported on a related issue of broadcaster Virgin Media querying the current Premier League broadcasting rights deal with UK media regulator Ofcom. Virgin Media are unhappy with the current allocation of rights, where the Premier League sells six broadcasting packages to the highest bidder. They believe the Premier League are limiting supply, and therefore, creating an artificially high price for consumers.
Virgin Media want to make all 380 Premier League games available live on television, and have lobbied for a removal of the traditional 3pm blackout in England, wanting the US-style “regional blackouts”. This would mean that fans based in North London for example, would not be able to watch Arsenal or Tottenham live on TV but could watch Manchester United or Liverpool.
Virgin Media’s stance is interesting but I wonder will it solve the problem for customers?
As mentioned previously, UK customers now pay more in total, and on average, to watch all live games available each season, despite the fact that Sky Sports’ monopoly ended in 2007. Setanta, ESPN, and most recently BT Sport have done little to push prices down for the consumer.
Why has competition not worked?
The problem lies in the fact that broadcasters compete to buy each of the six broadcast packages but do not compete on the broadcasting rights of individual matches, once they secure the rights. Imagine if both Sky Sports and BT Sport were broadcasting the same live matches. Customers could choose to purchase the rights from the company that was the cheapest, provided the best analysis, overall value, offered best punditry etc. Selling the rights off in tranches of six does little for the consumers. Smaller monopolies are emerging. The current scenario is very much in the interests of the sellers. How much would a TV company pay for a broadcast package if it were not an exclusive right to screen those games? A fraction of what they are now paying.
There are a plethora of unintended consequences that could emerge if Virign Media's proposals are adopted. Lower league clubs should continue to fight to retain the 3pm blackout and need only look at attendances in the the League of Ireland since the late 1970s and early 1980s onwards to see the damaging impact televised football can have. Daire Whelan's Who Stole Our Game plots the remarkable decline in attendance at domestic Irish football matches following the arrival of live broadcasts. The Irish 'blackout' was overcome by technology. Technology is again threatening to end the blackout in England. Smaller clubs beware.