Magazine article Marketing

OPINION: BSkyB's Pounds 1bn Premiership Deal Makes Economic Sense for All

Magazine article Marketing

OPINION: BSkyB's Pounds 1bn Premiership Deal Makes Economic Sense for All

Article excerpt

The new football TV rights deal looks like a rare beast - a competition where everyone emerges a winner. Well, almost everyone. Not for the first time, the exception was ITV, but then it does not deserve our sympathy because it made a pig's ear of broadcasting the Premiership highlights.

There can now be unbridled joy in the land of football at the return of Match of the Day, and Greg Dyke won't have to feel such a failure any more.

Much has been made of the fact that BSkyB is 'only' paying pounds 1.064bn when it will be getting rights to 138 live matches instead of 66. The arithmetic is indisputable. The satellite broadcaster is getting its matches at a bargain basement 40% off.

But the remarkable thing is that BSkyB is paying pounds 1bn at all, for rights that could have been obtained for half that if crude market forces had been operating. The reality is that only one player - BSkyB - has the capacity, the ability and the need to show large numbers of live matches in the UK.

The formula for TV rights is quite simple. Without real competition, the price collapses. Yet for some reason, in this case, it did not happen.

The implications of BSkyB paying pounds 1bn more than it strictly needed to over the three-year contract are clear. It is not only playing a long-term game, but it regards the Premier League as a partner and the creator of Sky's most important single product - a competitive and prosperous league.

Grind the league down and Tony Ball would, over time, have been damaging himself. …

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