One football team, but no opposition
Money seems to be cascading out of Scottish sport.
Diadora went under last week, taking with it the kit sponsorship of the Scotland football team.
The same happened yesterday to Canterbury Europe, kit sponsors of the Scottish rugby team.
Could it be that Scots fans are unpersuaded by the value-for-money of their national teams' replica kits?
And of course, there's the mess left by Setanta's collapse.
There was a concern that only Sky Sports would want to replace its contract to televise Scottish Premier League matches. And without competition, of course it could name its price.
So the hope was that a big sports pay-TV player - ESPN, part of the Disney empire - could come in from the United States and force an auction for the SPL rights.
Some hope.
We're now told that the two giants have got together and they're bidding to share the rights between them.
That's for no more money than Setanta paid over the past four years, while wanting to lock in the Scottish clubs for the next five years.
That helps explain why the Old Firm clubs have let it be known they're trying to put together their own alternative to Sky and ESPN.
It's hard to see how they could sustain the business model, or that it's going to be in the smaller clubs interests.
But it's more likely that Rangers and Celtic are trying to force the TV companies to think again - at least to shorten the length of the tie-in contract.
When Sky Sports got this level of domination over English premiership football, the European Commission stepped in.
Its answer was to force the league to split its TV rights into six packages, not all of which could be secured by one company.
Perhaps the European Commission should take a look at what's currently happening with the Scottish Premier League.
If, as seems to be the case, Sky and ESPN are bidding jointly, it doesn't look like healthy competition, and it doesn't look good for Scottish football.
Comment number 1.
At 14th Jul 2009, TLJ wrote:The OF vetoed the SPL TV proposal when it was first mooted a few years back. May I suggest that this is just a tiny bit hypocritical of them (but why should I be surprised ?)
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Comment number 2.
At 15th Jul 2009, Graham04 wrote:The Old Firm and Aberdeen also vetoed the original Setanta deal in favour of the lesser Sky deal, knowing full well that Sky was the much more financially stable option.
They vetoed the original SPL TV as it was unsustainable compared to other options on the table at the time. Now they are extremely limited in who they can sell their rights to.
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Comment number 3.
At 15th Jul 2009, EdenRooms wrote:No one has actually reported anywhere as to how this may work in practice. I certainly don't expect it to be poured over in any great analytical detail in the pages of the DR or Murdoch's Scottish Red Top.
Should Celtic and Rangers win the rights for £25m over two years presumably they would make 6 separate payments of around £4.25m each to the league to be dispersed to the other 10 clubs, as per the provisions of the Setanta deal, working out at £2.5m over two years per club.
What I am unclear about is where Celtic and Rangers would then find the broadcasting partners to produce the broadcasts and sell the games, and on which formats? Presumably SMG would be a natural broadcasting partner given their tie in with Setanta.
To make this financially viable both clubs would need to absorb sunk costs of licensing, broadcasting, production and customer support and make at least £3m over and above this to be successful. Does the model under proposal allow for the clubs to then sell games in packages to interested parties, like the Glasgow and Edinburgh derbies, league deciders and other attaractive games?
Also, how is such a TV station or broadcasting arrangement constituted in such a short time? Any potential bias towards either of the Glasgow clubs will be leapt upon by a suspicious body of supporters of other clubs. Will they really dig in to their own pockets to fund a system where the larger the profits, the greater the benefit to the Celtic and Rangers? As it is, Celtic and Rangers will undoubtedly feature in the majority of games televised.
I would like to see this solution work, because I feel the current offer from Sky and ESPN is derisory and as Douglas Fraser has pointed out, very close to being oligopolistic price fixing. On the other hand however, it could be argued that it is basic economic theory; your product is only worth what people are willing to pay.
It is clear that the cat is out of the bag and the proposal is being readied. However I feel there is a lack of detail as to how this arrangement might roll out in practice which threatens to seriously undermine any attempts to make it credible. I would invite anyone with any business sense and broadcasting knowledge to shed some light on this for the good of the paying football public.
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Comment number 4.
At 15th Jul 2009, i-amsoccerdoc wrote:Where are SMG going to get this money from? All we hear from them is the sale of more assets. I dont really see terrestrial TV as being the saviour of Scottish football. There is just not enough money in it - especially with the recession and the consequences for advertising.
Nor is a UK deal, of the sort that Sky or ESPN might offer, likely to improve things all that much, as, if we are being honest, the product isnt that attractive. The rights for the OF games are probably the "jewel in the crown", but how many viewers will (and no disrespect to these clubs - there are loads of other examples) St Johnston playing Kilmarnock on a wet Wednesday night bring in? The fact is that Sky have pretty much got the UK market for TV tied up. The govt should do something about it, but wont because they wouldnt want to upset Murdoch (particularly with an election coming up). Scottish football just isnt a big enough deal that we can rely on the European Commission to take as much interest in the competitiveness of its TV deal, particularly as it attracts little interest elsewhere in Europe (unlike the Premiership).
One route for the game up here to make some additional funds is to actively seek to sell rights in places like Canada, South Africe and Australia - in other words, anywhere there is a significant Scottish population. Managing that kind of delivery might generate additional funds, but I am unsure if the SPL has focused on that issue with enough precision.
But why Rangers and Celtic? Why not the SPL itself? A Rangers and Celtic option would give them an even bigger share of tv revenue than they have now. If we assume that it wont run at a loss (a big assumption, but on the other hand I dont see the OF signing up for something they know will make a loss) then as well as the share of the tv revenue that they would get as SPL members, they would ALSO gain any profit that was made, so further unbalancing the Scottish game - which is one of the reasons it is seen as unattractive. If this could be a profitable venture then why are the SPL not doing it and distributing resources to ALL its members instead of further enriching two of them?
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Comment number 5.
At 15th Jul 2009, Jonathan wrote:Surely the best thing to do is sell the rights to a free-to-view terrestial channel. That will bring in less money, I know, but it will give the SPL something it badly needs, more supporters and more recognition. Walk down the street of the 'average' Scottish town and you'll see ever more Chelsea, Arsenal, Man Utd, etc tops, and this is not repatriated English folk - this is young people who have an apathy for Scottish football. If they could actually watch their teams this might change. Otherwise the SPL is going to undergo a long painful death, and ironically less cash in the long run.
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Comment number 6.
At 15th Jul 2009, Iain wrote:I truly hope that no deal gets done and the clubs who have benefited from spending money they didn't have and can't afford to repay are severly hurt in the process. Teams like Kilmarnock are no bigger than a lot of sides in the First and Second Divisions, with the key difference that they have profited and taken advantage of unrealistic lending with no real prospect of repayment. Take away the TV money and let ALL the clubs in Scotland find their own sustainable level, whether it is full time, part time or otherwise.
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Comment number 7.
At 15th Jul 2009, EdenRooms wrote:I used the SMG example given their previous agreement to provide logistical support to Setanta in broadcasting games. I am not suggesting they have the resources to make a realistic bid for the rights. For a start they are limited to Scotland. Scotland needs as big a mainstream UK broadcasting partner as possible. With Setanta gone, Sky is almost the only game in town, as ESPN look like they are going to learn the lessons of the Setanta model and be more minimalist in their approach. These rights are for UK broadcasting only, and the SPL still has an overseas rights. However what is very interesting is that the domestic package includes internet rights, and I think this is one of the angles that Celtic and Rangers think is more lucrative than is being given credit for.
For once, I hope the SPL and the representatives of the 12 clubs can show a professional outlook to their deliberations on this. They have already made two catastrophic errors in their negotiations over a television deal, they cannot afford to make another out of self interest and narrowmindedness.
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Comment number 8.
At 15th Jul 2009, i-amsoccerdoc wrote:There are so many freelances and facilities companies that they could contract with for specific matches, that I dont think they would really need SMG.
Your point about internet rights is an interesting one, and might be a delivery mechanism to the Scottish diaspora who want to keep with the doings of Perth Saints play Killie)
I would hope to that they could show a professional outlook on this - though it would be the first time for a long time. Lets hope the new man coming in to replace Lex Gold can accomplish this.
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Comment number 9.
At 16th Jul 2009, uk_abz_scot wrote:Douglas
1) I wonder how many Scots subscribe to the English Premier offering on SKY. Another problem is that the SPL are fighting a very uphill battle to compete with the English Premier League. Even the French or German leagues would find it tough going
2) Watching the Old Firm canter off with the league every year might be popular with their supporters but as TV viewing it is like watching Lions eat Antelopes every weekend on a wildlife channel - the novelty wears off. Then add to the weak product certain referees who never give visitors to Glasgow penalties and only see bad tackles by non-old firm players.
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