9/19/2012 12:29 AM
A battle royal is developing in the UK between BSkyB, the country’s pay TV leader, and BT Vision, currently a poor third, for rights to Europe’s premier competition for rugby football.
But, for once, the two protagonists are taking a back seat, conducting the fight almost by proxy, as the U.S. and the Soviet Union did via client states during the Cold War. That analogy may be stretching things a bit, but there is a huge amount at stake as BT Vision aims to seize market share from BSky B and also pay TV number two, MSO Virgin Media, as the two have just over 10 million and around 3.7 million TV subscribers, respectively. BT Vision currently has about 750,000.
While rugby is less popular than soccer in the UK, it still attracts a sizable audience (mostly from the middle classes with decent incomes) and is therefore an attractive target for pay TV operators and advertisers. At stake here are future rights for the Heineken Cup, which is the leading annual competition for rugby clubs from the principle six nations playing the sport: France, Italy, England, Scotland, Wales and Ireland. BSkyB currently holds the rights, but BT Vision stepped in with a £152 million bid for TV rights for three seasons beginning in 2014.
The only problem was the rights that BT Vision bid for, and was granted, were not for the Heineken Cup, but for a new competition for which, at present, only English clubs have signed up. This immediately led to the ERC, the governing body of the Heineken Cup, claiming that Premier Rugby, which runs the English game, had breached International Rugby Board regulations in selling broadcasting rights for games involving English clubs for three seasons from 2014. ERC then announced that it had signed a new four-year broadcasting deal, not with BT Vision but with Sky, for its European competitions.
This is leading to a big legal battle involving the various factions of the sport. At the root of it is resentment among English and French clubs over the easier path to qualification for the tournament enjoyed by teams from the other four countries, which bring in far less revenue. But, there is disagreement between the English and French camps over how to proceed, and it seems the English have jumped out of line to strike this agreement with BT Vision, hoping to bounce the others into following. This does not now seem so likely to happen. And, for BT Vision and Sky, it looks like the matter is largely out of their hands. The case is likely to rumble on for some time yet, but it illustrates how the intense battle for rights that underlies competitiveness in pay TV can stoke infighting between rival bodies and factions within sports.