Philip Hunter /
03.28.2011
Originally featured on BroadcastEngineering.com
European Broadcasting Union reaches deal for major cycling events

The deal struck March 22 between the French Amaury Sport Organization (ASO), organizer of some of the biggest cycling events, and the European Broadcasting Union (EBU) highlighted the continuing tensions in Europe between the pay-TV industry and regulators. Under the terms of the deal, events organized by the ASO, including the Tour de France, will be covered by traditional analog general-interest channels as well as a pan-European sports channel. RTBF will provide the signal for the Flèche Wallonne and the Liège-Bastogne-Liège, while the other events, including the Tour de France, will be covered by France Télévisions, with which the ASO has an agreement until 2013.

Rights to major sporting events have long been a battleground between regulators and the pay-TV industry in Europe. But the increased competition for eyeballs from proliferating IPTV and OTT operators has intensified competition and made acquisition of sporting rights more intense than ever. This has led to the paradox where major operators may actually lose out on their most valuable asset: rights to a major sport over a period of time. In the UK, for example, Sky paid £3.3 billion (about $5.2 billion) for broadcast rights to matches of the English Premier League for 2010 to 2013, but it loses on that deal measured in terms of pure subscription revenue taken directly as a result. The net revenue gain comes as a result of people subscribing to Sky rather than an alternative pay-TV service, creating a captive audience for other content. This, in turn, boosts advertising revenues and creates the potential for other selling activities, notably pay per view for once-off major events. Indeed, subscribers can end up paying twice for a given event: for the premium sports package and then for the pay-per-view event available only within that package.

In Europe, the critical sports for pay-TV operators vary between countries. In Spain and the UK, as well as Italy to a large extent, soccer is the key sport. But in France and Belgium, cycling ranks highly, which was why there was keen interest in the outcome of the negotiations between the EBU and ASO. The subtext is that regulators in Europe feel it is their duty to protect major cultural and sporting events from being hijacked by pay-TV operators, which deprives many people, including the poorest, from having access to mainstream national content and being victims of an “entertainment divide.”

The regulatory bodies responsible for the sports, such as the ASO, are caught between the competing objectives of maximizing income and providing as wide access as possible to spectators. In the UK, commercial forces have largely won out, with the national broadcaster, the BBC, only allowed to show recorded highlights of Premier League matches. But more recently, UK broadcast regulator Oftel has become more assertive by compelling Sky to reduce its wholesale prices for Premier League matches to rivals, notably cable TV provider Virgin Media and IPTV operator BT Vision. But, the fact the regulator had to act reflected the earlier mistake in allowing Sky to obtain a near-monopolistic position. This left the Premier League itself in a difficult position that was relieved slightly when Yahoo won the online rights to Premier League matches for an undisclosed sum, which created an alternative outlet and, in turn, broadened the audience.

The detrimental impact of pay TV can be more evident for slightly less popular sports, such as cricket in the UK. Here again, Sky gained rights to some premium events, notably the Ashes series comprising five five-day matches between England and Australia. Although these matches continued to draw crowds, the combination of a glut of events to meet demands of pay TV, and growing unfamiliarity among young viewers through not being able to watch cricket matches, led to a sharp decline in attendance at lesser events.

It could then be argued that it is in the interests of pay TV as a whole for there to be a thriving competitive market for sporting events, rather than just allowing a single operator exclusive rights. For the foreseeable future, some major events should be available via free-to-air broadcast, as still happens in the UK in the case of the Wimbledon Lawn Tennis championships.



Comments
Post New Comment
If you are already a member, or would like to receive email alerts as new comments are
made, please login or register.

Enter the code shown above:

(Note: If you cannot read the numbers in the above
image, reload the page to generate a new one.)

No Comments Found




Wednesday 9:02AM
Analysts: TV Regs 'Not as Dire as We Thought'
We feel the negatives are known and are a lot more comfortable recommending the space.


 
Featured Articles
Discover TV Technology