Saturday, July 21, 2007

Why BSKYB is likely to remain the dominant player in the live football TV rights market...

A few years ago BSKYB was outbid for Football League TV rights by an outfit known as ITV digital, or ONdigital, who were beset with technology problems due to the encryption on their dodgy set-top boxes being cracked. As a result many ONdigital customers were watching live Football League games for free. A subsidiary of Newscorp, who own BSKYB, was eventually sued for releasing details on the encryption technology.

Further to which the speculation was at the time that BSKYB had actually allowed ONdigital to win the live Football League TV rights knowing that ITV Digital overpaid in the bidding process.

Predictably ONdigital eventually collapsed in 2002 leaving many football League clubs in near financial ruin. ITV Digital was a total disaster. Following the collapse of ITV Digital, BSKYB and other broadcasters were left to pick up the pieces and were given the Football League TV rights.

Roll the clock forward to 2006 and Setanta Sports won the live TV rights to screen 46 Premiership games for the coming season ahead, their gain came at a very high price though, £392m to be precise.

When this news broke I actually personally spoke to one of my contacts who works for BSKYB and he told me that they weren't bothered at all about losing these 46 live games, because Setanta are a satellite broadcaster and as such SKY's technology would still be utilised.

So despite losing the TV rights to 46 games BSKYB remain in the loop. Further to which it was put to me that it wouldn't come as any surprise if Sky had allowed Setanta to over bid to win this contract, thus raising the spectre of another potential ONdigital like collapse.

The very latest news is that Sentanta have had to broker a cut-price wholesale deal with Virgin Media because according to The Times they haven't currently attracted enough subscribers. Analysts are predicting that once Sentanta reaches its targets, it will eventually be sold on, but it's doubtful that Virgin Media will turn out to be a likely buyer, because they too could soon be sold. All of which points to BSKYB remaining the dominant broadcaster of Premiership TV rights for the foreseeable future.

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