June 15th, 2012
02:00 PM GMT
What recession? With BSkyB vastly increasing the price it’s willing to pay to show England's Premier League football matches, the 20 teams that make up the league have ever more money to attract top talent.
But are people like me, who pay near $100 a month for Sky, going to have pay more to watch the matches?
Sky says no. It’s believed the satellite channel, partly owned and controlled by Rubert Murdoch's News Corp., will instead cut costs and services elsewhere in order to keep its overall costs from skyrocketing just to air football.
I say ‘just’, but really Sky has been all about football - it helped create the Premier League 20 years ago, and pubs and many people (like me) pay a subscription to be able to watch sports which have moved from free-to-air to pay TV in that period.
Sky simply could not afford not to pay the most to get the majority of the matches. I think people would have cancelled their subscriptions in droves if a free-to-air channel or rival foreign service, like ESPN or Al Jazeera, had offered to pay more for the matches.
How much is this costing Sky?
Of the $4.7 billion dollars Sky and telecoms firm BT are paying to air the matches for three years from summer 2013, the Guardian newspaper estimates Sky is paying $3.5bn, or 40% more than its paying for the current deal (the paper points out some films are made on a smaller budget than each and every single match that it will cost Sky).
BT was the real shocker here, beating out ESPN for the rights to broadcast a mix of top tier and second-tier matches. The former phone monopoly is spending billions of dollars to upgrade its fiber-optic network and now a few billion more to air matches, on a channel that does not yet exist. Good luck creating a new channel and then asking viewers like me to pay for it.
I already pay $15 extra each month for ESPN - in part for the Premier League matches it currently airs, but also for American baseball and football – so I doubt I will pay for a third sports channel to watch Arsenal take on Stoke City or West Ham.
Funny, ESPN got the football rights after Setanta's UK arm could not keep up with Sky and went into administration. ESPN does have the rights to football in secondary leagues in places like Scotland, but will that be enough to keep people from dropping its UK service?
To me, Sky is paying far too much for the rights, but it had no choice. The beneficiary will be the players and their agents. It’s likely each team will have an extra $20 million a year in cash coming in the door, which I suspect will quickly go out the door again in the player's kit bag.
In these austere days, the teams should probably use it to pay down their debt. Unlikely.
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