Will Sky Keep Its Place in the Television Premier League?

Marketing, May 11, 2000 | Go to article overview

Will Sky Keep Its Place in the Television Premier League?


Sky must win the key Premiership package, literally at any cost, writes Claire Murphy

Today (Wednesday) is the final day for bids from media companies wanting to broadcast Premier League football matches from 2001.

At stake are a number of 'packages' of broadcast rights, divided up by a Premier League keen to make as much money as possible for the clubs. At the moment, Sky is enjoying exclusive rights to all live Premiership games, with the BBC allowed to screen highlights later in the day.

These deals were negotiated four years ago, costing Sky[pounds]670m and the BBC[pounds]73m. The package currently held by Sky is being carved in two; 66 live matches and 40 live pay-per-view games. The 66 live matches alone are thought capable of raising[pounds]1bn for the Premier League.

And despite the increased cost, bidders will not get a five-year deal this time round; the new rights will run for three years from next season.

Interested parties will have looked on in horror at the recent mobile phone bidding war, which scooped [pounds]22.5bn for the government. Premier League spokesman Mike Lee emphasises that this week's bids are only being regarded as initial numbers, "which we can then take into final negotiations". It is still to be decided whether the final round will be by auction or sealed bid.

Sky equals sport

Much of the debate surrounds the fate of those 66 live broadcasts, and whether Sky can afford to lose the rights to one of its main programming jewels.

Live football remains one of the key drivers of Sky's subscriptions; of its nine million subscribers, more than 60% receive Sky Sports.

Colm Feeney, broadcast director at Western International Media, considersit "vital for Sky's business that it hangs on to the live match rights".

"They've built that business on having exclusive rights to key film and sporting programmes. Although they have started to move into other sports, the rugby Superleague, for example, football is still the top audience draw."

Recent marketing from SkyDigital has attempted to move it away from its sporting perception, instead concentrating on the breadth of programming. Indeed, in her resignation statement last week, Elisabeth Murdoch made particular mention of Sky-commissioned films and new drama series like 10th Kingdom for Sky One.

Sky's main rival for the live matches is likely to be cable firm NTL, the new number one cable player following its purchase of Cable & Wireless Communications. NTL's chief executive, Barclay Knapp, has confirmed it will bid. The company is flush with cash as well as relevant bidding experience, having recently withdrawn early from the pricey mobile licence auction.

Despite spending [pounds]29m or its consumer launch campaign, NTL needs to secure exclusive programming deals that will make its TV service stand out. This week, it announced the roll-out of its digital services, backed by a [pounds]15m marketing spend. Securing key Premiership matches would give it an ever greater marketing boost.

However, some observers believe NTL would not part with [pounds]1bn for the 66 live-game package. …

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