No Efficiencies Found In Sports Broadcasting, Only A Deep Hole

Michael Hedges July 3, 2014 Follow on Twitter

European public broadcasters once held a distinct advantage in sports broadcasting, largely from generous staffing and advantageous sports rights contracts. Those days are fading fast. Pay-TV operators and telecoms have roared into sports broadcasting with buckets of money.

Spain’s public broadcaster RTVE is considering closing sports channel Teledeporte, integrating much of the programming with second national channel La 2 and creating a website “entirely dedicated to sports, in line with the great European public channels,” said a statement, quoted by 20minutos.es (June 30).  Teledeporte has been on the air since 1994, broadcasting most every major sports event of interest in Spain along with all the sports news and requisite commentaries. Shutting down the sports channel would, said the RTVE statement, “reduce programming costs” as well as “substantial transmission costs.”

RTVE management is also studying reductions in board and management costs, temporary employment and voluntary redundancies. An agreement between RTVE and the Spanish government, which led to a €130 million cash injection, effectively prevents wholesale layoffs through 2015. In 2006 involuntary redundancies and forced retirement of more than four thousand workers led to street demonstrations.

Reducing ever escalating sports rights costs would be a significant savings. RTVE spent €30 million to cover the Sochi Winter Olympic Games. When the possibility of closing Teledeporte was floated in 2011 minority sports federations raised a howl.

The exit of several high profile show hosts from the BBC’s sports/news radio channel Five Live, announced this week, were only obliquely related to cost savings. Three years ago the Five Live operations were relocated from London to the Salford Media City complex, near Manchester. Those exiting had been commuting from London, which BBC managers discouraged.

Sky Sports launched in 1991 as the first pay-TV sports channel offered in the UK and Ireland. In June the subsidiary of UK pay-TV giant BSkyB announced it would begin offering its seventh sports channel this August, Sky Sports 5 dedicated to European football. Sky Sports competes with BT, formerly known as British Telecom, which offers two channels as BT Sport. A relative newcomer BT Sport arrived in 2013 after acquiring Premiere League football rights and taking over the UK and Ireland operations of US sports TV channel ESPN. Both BT and BSkyB offer customers multitudinous television and broadband packages. 

Another relative newcomer is BeIn Sports, operating in three channels in France, the Middle East, Asia and North America. Originally Al Jazeera Sports it dramatically won bidding for various football rights in France, taking on legacy pay-TV operator Canal+. According to Kantar BeIn Sports added more than 800,000 subscribers during the first two weeks of the Brazil 2014 World Cup, for which it has rights to the entire 64-match tournament.

Canal+, owned by Vivendi, sued BeIn Sports in French court for unfair competition and asked nearly €300 million in damages. The court tossed the suit in June noting that BeIn Sports customer charges are in line with market rates and Canal+ has been spending competitively for rights. Public network France Télévisions continues to carry some sports events, the Tour de France notably. French commercial television company sold a majority stake in Eurosport, three channels, to Discovery Communications, completed this year. 

Discovery Communications, which acquired the SBS Nordic business from ProSiebenSat1.Media last year, announced agreement with Bonnier’s C-More network to buy two Danish pay-TV channels, including Canal 8 Sport. SBS Discovery has acquired television football rights across the Nordic region where public broadcasts have been able to hold on to all-sports radio channels.

Those buckets of money flowing into pay-TV have forced decisions on public broadcasters and their free-to-air commercial compatriots about sports offerings. Costs – not only rights – have soared forcing public and private broadcasters to concentrate on fewer marquee events and less expensive talk-shows. Is there a sports bubble? Of course, but when this one finally bursts those buckets will be filled with something else.

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