Ashes for Free – Dust for Murdoch

Michael Hedges November 16, 2009 Follow on Twitter

Television, sports and money fit together nicely. They form an eternal triangle, feeding each other and feeding on each other, rising higher, getting richer. Everybody’s happy when they get what they want.

An expert report to the UK government recommended opening several major sporting events to free-to-air television (November 13). The list includes the Summer Olympic Games, the two weeks of Wimbledon tennis, FIFA World Cup football finals plus home and away qualifiers, UEFA European Championships plus home and away qualifiers, the Rugby Union World Cup and the Ashes Home Test cricket matches. Howling from sports rights holders was heard across the land.

David Davies, a former executive director of the UK Football Association (FA), took ten months preparing the report at the request of the UK government as a review of public access to “events of national significance.” The UK government, eventually, will adopt a new “crown jewels” list of big events, mostly sporting, deemed sufficiently important to be widely available to the public on television. That would be free-to-air television. That would not be pay-TV or, presumably, newer forms of charging punters for each and every Test cricket match.

“I believe our report is challenging for the sports governing bodies, the broadcasters and the Government,” said Davies in a statement. “But unashamedly it puts the viewing public first.”

Athletic associations – presumed owners of that intellectual property – are howling mad. Without the rights revenue from broadcasters the deprivation will cause pain and suffering. Ticket, merchandising and sponsorship revenues are insufficient for maintaining tip-top programs, not to forget executive and player salaries.

"If the revenue stream is not there then it's going to have a disastrous effect,” said Scottish Football Association (SFA) Gordon Smith to the Edinburgh News (November 13). “That's why we've gone with satellite." The SFA has a £60 million deal with BSkyB.

The Davies recommendations, published by the UK Department of Culture, Media and Sport, will be put to a 12 week public consultation by UK culture Minister Ben Bradshaw and Sport Minister Gerry Sutcliffe. Whatever is finally adopted will affect sports rights bidding after digital TV switch-over is completed in 2012.

Seething at the recommendation is pay-TV operator BSkyB and, presumably, its principal owner Clan Murdoch. “Rights-holders should be free to decide how to balance the investment, exposure and depth of coverage that broadcasters can offer,” said a BSkyB statement, spinning away from its transparent economic interest. “And they should be trusted to sell their rights and invest in their sport so they can develop, plan for success and encourage participation at all levels. It is disappointing that the panel did not fully consider the financial implications, the true costs, of listing sports events. For the future health of sport, the Secretary of State has to.”

Supporters of the “crown jewels” list including Ashes Home Test cricket point to, among other things, the vast difference between viewing levels on free versus pay-TV. Nearly 8 million watched in 2005 on free-to-air Channel 4, three-quarters less watched this past year on BSkyB. Sports commentators in the UK have also noted superior coverage on BSkyB, investment having its pay-off. Last year, BSkyB renewed for four years its rights deal with the England and Wales Cricket Board (ECB) for £220 million (about €250 million).

Lost on most UK commentators is a broader European implication. More than a decade ago, European Union (EU) Member States ratified the Television Without Frontiers Directive (TVWF). In it is a provision – Chapter II Article 3a – allowing EU Member States to draw up a list of “events of national significance” to be made accessible to a citizens on free-to-air television. In addition – and certainly not lost on Clan Murdoch – is the provision for the “list” of one EU Member State to be respected by other EU Member States.

TVWF - Article 3a

1.

      Each Member State may take measures in accordance with Community law to ensure that broadcasters under its jurisdiction do not broadcast on an exclusive basis events which are regarded by that Member State as being of major importance for society in such a way as to deprive a substantial proportion of the public in that Member State of the possibility of following such events via live coverage or deferred coverage on free television. If it does so, the Member State concerned shall draw up a list of designated events, national or non-national, which it considers to be of major importance for society. It shall do so in a clear and transparent manner in due and effective time. In so doing the Member State concerned shall also determine whether these events should be available via whole or partial live coverage, or where necessary or appropriate for objective reasons in the public interest, whole or partial deferred coverage.

   2.

      Member States shall immediately notify to the Commission any measures taken or to be taken pursuant to paragraph 1. Within a period of three months from the notification, the Commission shall verify that such measures are compatible with Community law and communicate them to the other Member States. It shall seek the opinion of the Committee established pursuant to Article 23a. It shall forthwith publish the measures taken in the Official Journal of the European Communities and at least once a year the consolidated list of the measures taken by Member States.

   3.

      Member States shall ensure, by appropriate means, within the framework of their legislation that broadcasters under their jurisdiction do not exercise the exclusive rights purchased by those broadcasters following the date of publication of this Directive in such a way that a substantial proportion of the public in another Member State is deprived of the possibility of following events which are designated by that other Member State in accordance with the preceding paragraphs via whole or partial live coverage or, where necessary or appropriate for objective reasons in the public interest, whole or partial deferred coverage on free television as determined by that other Member State in accordance with paragraph 1.

The Audiovisual Services Directive (2007), the upgrade of TVWF, made no changes to Article 3a.  A legal challenge in 2005 by sport rights management company Infront succeeded in requiring the European Commission to formally approve (or not) each Member States’ “crown jewels” list. The UK’s ITC will, when the list is finally approved, submit it to the European Commission.

EU Member States are not compelled to draw up these lists of events of national significance but encouragement is clearly there. “Major sporting events bring Europeans together,” said Info Society and Media Commissioner Viviane Reding when Finland became the seventh Member State to submit its list in 2007. “It is in the general interest that all TV viewers should have the opportunity to see them on free to air TV, as provided for in the Television Without Frontiers Directive. I am pleased to see that Finland is making use of this possibility, and I call upon the other Member States to offer the same right to all viewers.”

Public broadcasters – including the BBC – and commercial free-to-air broadcasters – including ITV - have complained about the cost of sports right bidding. “Digital switchover is not closing the huge gulf that exists between the reach of free-to-air and pay TV,” said ITV executive chairman Michael Grade in response to the Davies recommendations. “Twenty million-plus audiences for these events on ITV and BBC are simply not achievable on pay television. We look forward to engaging with government over the consultation period.”

Clan Murdoch is expected to be “engaging with government” over this and other media issues. Political and media observers in the UK suggest that James Murdoch and Conservative Party leader David Cameron have forged a special relationship, trusting that support from Clan Murdoch’s media will tilt the coming election. The presumed quid pro quo would be a UK government amenable to shrinking the BBC and allowing BSkyB the “freedom” to emulate its unabashedly right-wing (and veracity challenged) American sister Fox News. The “wish list” is apparently quite long and includes “reclaiming” British sovereignty from onerous EU rules.

Major sporting events are made for TV. Rights fee bidding has pushed many off free-to-air TV to the benefit of pay-TV platforms. Public interest in major events competes with the economic interests of broadcasters as well as sports associations, teams and rights holders. While the right to compete – whether for David Beckham, James Murdoch or your daughter – is generally upheld in Western law, there is no such right for a business to get everything it wants.

See also in ftm Knowledge

The Games People Watch

Media and sports are a powerful combination. Together they capture huge audiences and considerable money. This ftm Knowledge file looks at the competition from football rights battles and cycling coverage with new media to the Olympic Games. 60 pages PDF (September 2009)

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