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#MoreBalls For UK Football Fans
2
N
Foreword
obody can deny the success of football. It’s a credit to the UK at home
and overseas.
The Premier League is a phenomenon; a rich cultural history, a cast of
international and talented stars, and an unsurpassed worldwide appeal.
And a recent economic assessment report by Ernst & Young showed the
substantial contribution that the Premier League makes to the UK
economy.
In February 2015, the Premier League delivered another record-
breaking deal in the sale of domestic TV rights. It had auctioned three
years’ worth of live broadcast TV rights for £5.136bn; a 71% increase on
the previous deal.
The deal, however, rightly raises questions about whether those farthest
from the top, the grassroots and the fans, will benefit sufficiently from
the windfall.
The key question is whether the benefit delivered outweighs the
consumer harm.
This report examines the facts.
3
Based on last season
(2014-15) Premier League
2016/19 domestic live TV rights
for the Premier League
Foreword
The way the Premier League auctions
live TV rights is at the heart of the issue.
It sells them on an exclusive basis and
restricts the number of games broadcast
in the UK and so the wholesale and
retail costs increase.
Virgin Media is the only pay TV provider
offering all available live games in one
place; we buy the football channels
wholesale from BT and Sky.
We lodged a formal complaint with the
UK media regulator Ofcom and, in
November 2014, it opened an
investigation; it has been investigating
our complaint for over a year.
I am convinced there is a better deal for
football, for fans, and for the TV
business.
I hope this report will help shape an
informed debate
TOM MOCKRIDGE
CHIEF EXECUTIVE VIRGIN MEDIA
December 2015
[CONTINUED]
4
The Premier League, TV rights and viewing costs
he Premier League is the top of any division when it comes to negotiating TV rights. Since it was formed in 1992 the cost of
domestic live TV rights per season has grown from £43m to £1.78bn, an increase in value of more than 4,000%
Fig 1: Prepared by Virgin Media
Fig 1. The cost (£m) per season of domestic live TV rights deals: 1992-2019
T
43
186
461
376
626 651
1,066
1,780
0
500
1,000
1,500
2,000
£m
1992-
1997
1997-
2001
2001-
2004
2004-
2007
2007-
2010
2010-
2013
2013-
2016
2016-
2019
Growth
2016-19
Sky 191 670 1,200 1,024 1,314 1,623 2,280 4,176 1,896 83%
Setanta/ESPN/BT 392 159 738 960 222 30%
Live Matches 191 670 1,200 1,024 1,706 1,782 3,018 5,136 2,118 71%
Highlights 23 73 183 105 172 172 180 204 24 14%
Domestic 214 743 1,383 1,129 1,878 1,954 3,198 5,340 2,142 67%
Overseas 40 98 178 325 625 1,437 2,233 2,903 670 30%
Total 253 841 1,561 1,454 2,503 3,391 5,431 8.243 2.812 52%
Number of years 5 4 3 3 3 3 3 3
Domestic 43 186 461 376 626 651 1,066 1,780 714 67%
Overseas 8 25 59 108 208 479 744 968 223 30%
Average per year 51 210 520 485 834 1,130 1,180 2,748 937 52%
5
UK
LIVE
Equal
Share
£
Facility
fees
£
Merit
payment
£
Overseas
TV
£
Central
commercial
£
Total
payment
£
Chelsea 25 21,968,793 19,928,800 24,897,960 27,757,371 4,392,630 98,999,554
Manchester City 26 21,968,793 20,729,976 23,653,062 27,757,371 4,392,630 98,501,832
Arsenal 25 21,968,793 19,982,800 22,408,164 27,757,371 4,392,630 96,509,758
Manchester United 27 21,968,793 21,477,152 21,163,266 27,757,371 4,392,630 96,759,212
Tottenham Hotspur 18 21,968,793 14,752,568 19,918,368 27,757,371 4,392,630 88,789,730
Liverpool 25 21,968,793 19,928,800 18,673,470 27,757,371 4,392,630 92,775,064
Southampton 13 21,968,793 11,016,688 17,428,572 27,757,371 4,392,630 82,564,054
Swansea City 12 21,968,793 10,269,512 16,183,674 27,757,371 4,392,630 80,571,980
Stoke City 10 21,968,793 8,772,160 14,938,776 27,757,371 4,392,630 77,832,730
Crystal Palace 11 21,968,793 9,522,336 13,693,878 27,757,371 4,392,630 77,335,008
Everton 17 21,968,793 14,005,392 12,448,980 27,757,371 4,392,630 80,573,166
West Ham United 13 21,968,793 11,016,688 11,204,082 27,757,371 4,392,630 76,339,564
W Bromwhich Albion 10 21,968,793 8,775,160 9,959,184 27,757,371 4,392,630 72,853,138
Leicester City 10 21,968,793 8,775,160 8,714,826 27,757,371 4,392,630 71,608,240
Newcastle United 20 21,968,793 16,246,920 7,469,388 27,757,371 4,392,630 77,835,102
Sunderland 11 21,968,793 9,522,336 6,224,490 27,757,371 4,392,630 69,865,620
Aston Villa 11 21,968,793 9,522,336 4,979,592 27,757,371 4,392,630 68,620,722
Hull City 10 21,968,793 8,775,160 3,734,694 27,757,371 4,392,630 66,628,648
Burnley 10 21,968,793 8,775,160 2,489,796 27,757,371 4,392,630 65,383,750
Queens Park Rangers 11 21,968,793 9,522,336 1,244,898 27,757,371 4,392,630 64,886,028
£439,375,860 £261,428,440 £261,428,580 £555,147,420 £87,582,600 £1,605,232,900
TV rights and the clubs
he money available to Premier League clubs from
TV rights deals is significant.
Apart from domestic rights, there are also huge
international deals (see Fig. 1). For example, a six-
year package sold to NBC this summer, for US
rights only, is understood to have brought in around
$1bn (£600m), an increase of around 60% on the
last deal.1
Overseas TV deals for 2016-19 are estimated to
increase by 30% in total once all auctions are
complete.
Adding together the growth in domestic and
international rights sales, and using Fig. 2 as a
reference point, we can estimate that by the first
year of the new UK TV rights deal (2016-17
season), the top club in the Premier League is likely
to receive about £152m and the bottom club £92m.
Fig 2. Premier League TV & prize money in 2014-15 season, by order in leagueT
1 http://www.forbes.com/sites/bobbymcmahon/2015/08/16/will-new-nbc-premier-league-rights-deal-bring-some-fan-friendly-kick-off-times-for-us-based-fans
Fig 2: http://www.mirror.co.uk/sport/football/news/premier-league-clubs-profits-soar-5817486
(NB: half the domestic funds are split evenly between 20 Clubs, 25% is split among clubs depending on how many times they appeared on television
and the remaining 25% is awarding in a sliding scale according to where they finished in the table. 100% of the Overseas TV rights are split evenly as
are all other commercial rights held by the league eg to merchandise etc)
6
TV rights and the clubs
For all its wealth, the Premier League
seems to have had a negative effect on
the fortunes of England’s national team.
It’s struggled to make headway at
recent World Cup and European
Championship tournaments.
The growth in income for the Premier
League has encouraged clubs to spend
ever-increasing sums on talent and,
though clubs invest heavily in
academies, their primary purpose is to
find the best talent – rather than develop
a strong national team.
This was however supposed to be
a benefit from establishing the
League back in 1992, but it has never
happened
https://en.wikipedia.org/wiki/List_of_European_Cup_and_UEFA_Champions_League_finals
http://www.fifa.com/fifa-world-ranking/associations/association=eng/men/index.html
[CONTINUED]
9
England FIFA world ranking
2015
10
England average ranked
position since 1992
Football fans and TV subscribers are
entitled to ask how the money affects
team performance.
In the period since the Premier League
was founded (1992) there have been
four English victories: Manchester
United 1999, Liverpool 2005,
Manchester United 2008, and Chelsea
2012.
In the same period, the competition was
won nine times by Spanish clubs and
five times by Italian clubs: both operate
on much lower revenues from TV rights.
Chelsea was the most recent
Champions League finalist, and also the
winner, in 2012. But in the last several
seasons, Premier League teams have
been off the pace in Europe.
7
English clubs are champions of the money league
A new pattern of Premier League club
ownership has also recently emerged;
selling minority stakes to professional
investors. This is in part due to the live
TV rights deal, but it’s combined with a
greater degree of cost control arising
from the 2011 Financial Fair Play rules.
In the last few months, a consortium led
by private equity groups China Media
Capital and CITIC Capital paid $400m
for a 13% stake in Manchester City2,
Chicago-based PEAK6 bought a 25%
stake in AFC Bournemouth, and
Americans Harris and Blitzer each
settled on an 18% stake in Crystal
Palace.3
n the first season during which the
current £3.01bn three-year TV rights
deal took effect, most of the windfall
went to those who already had the
most: the players and their agents.
That first season (2013-14), spending
on salaries leapt from an average of
£1.6m to £2.3m a year per player.
That’s a 44% rise.
The Premier League leads the way in
paying players.
That great leap for UK footballers puts
them far ahead of Germany’s
Bundesliga, where players earn an
average £1.5m a year (see Fig. 3).
The Bundesliga’s average weekly salary
of £28,011 is 36% lower than the
£43,717 received each week in
England.
And that’s before we consider the effect
on UK salaries from the 71% hike in live
TV rights taking effect next season
(2016).
2 http://www.ft.com/cms/s/0/feb69226-9803-11e5-95c7-d47aa298f769.html?siteedition=uk#axzz3t9kcJsTo
3 http://www.ft.com/cms/s/2/592e9bc2-8f9e-11e5-8be4-3506bf20cc2b.html#axzz3t9kcJsTo
http://www.telegraph.co.uk/sport/football/competitions/premier-league/11231076/Average-Premier-League-salary-rockets-to-2.3m-as-clubs-TV-windfall-goes-straight-into-players-pockets.html
www.sportingintelligence.com
I
Premier League’s average annual salary
£2.3m
8
The overall income of Premier League clubs is already greater
than clubs in all other football leagues.
English clubs averaged an annual income of £155m in 2013-
14. The Bundesliga came second at £90m per club; 58%
lower.
Both Serie A and La Liga clubs had revenues on average less
than half those of Premier League, and French clubs got less
than a third (see Fig. 3).
The Premier League also tops the table of wage payments.
Other European leagues are able to attract world class talent,
so how much of a premium does the Premier League need?
English clubs are champions of the money league
Fig 3. Top 10 average player wage and club income 2013-14
Fig 3: http://www.dailymail.co.uk/sport/football/article-2833020/Premier-League-wages-dwarf-Europe-flight-players-England-earning-average-2-3million-year.html
Rank Country League
Average
player
wage per yr
(£)
Average
wage /
week
(£)
Average
club
income / yr
(£m)
1 England Premier League 2,273,277 43.717 155.0
2 Germany Bundesliga 1,456,565 28.011 90.0
3 Italy Serie A 1,313,681 25,263 71.7
4 Spain La Liga 1,213,024 23,327 77.5
5 France Ligue 1 987,933 18,999 48.3
6 Russia Premier League, RUS 901,600 17,338 46.7
7 Brazil Campeonato Serie A 583,333 11,218 35.6
8 England Championship 486,033 9,347 20.8
9 Turkey Super Lig, TUR 446,056 8,578 25.8
10 Mexico Liga MC, MEX 265,625 5,108 22.6
[CONTINUED]
9
eloitte reported in June 2015 that match day revenues in the
Premier League increased last season by 5% to £616m.
Far from going down as a result of money pouring in from TV
rights, the cost of watching football in a stadium is going up.
The benefits of ever-increasing TV income have not helped to
reduce the cost of match day prices for fans.
Are loyal fans being rewarded?
There is no indication that this disparity will end anytime soon
Cash in, cash out?
The BBC Price of Football survey 2015:
Deloitte: Revolution Annual Review of Football Finance – Highlights June 2015. https://www2.deloitte.com/content/dam/Deloitte/global/Documents/About-Deloitte/gx-deloitte-uk-arff-2015-highlights.pdf
BBC Sport Price of Football Survey: http://www.bbc.co.uk/news/uk-34507719
D
Match Day Ticket
Arsenal most expensive in the Premier
League
Chelsea cheapest in the Premier League
Season Ticket
Arsenal most expensive in the Premier
League
Stoke City cheapest in the Premier
League
£97
£52
£1,014
£294
10
Many remain unimpressed with the gesture.
Mr Whittingdale also pointed out that the bulk of the money
given away by the Premier League went to clubs like Fulham
and QPR in the form of parachute payments - introduced to
help relegated clubs absorb the huge losses in revenue that
accompany dropping out of the Premier League.
n February 2015, when the Premier League announced the
£5.136bn three-year deal for live TV rights, it said that £56m a
year “has been earmarked for grassroots projects, including 50
artificial pitches”.4
Overall, including the payments the Premier League makes to
other clubs in the lower leagues, Richard Scudamore said that
some £800m would be trickled down over the three years of
the new deal.4
After analysts pointed out that £800m of an estimated £8bn in
global TV rights income (between 2016 and 2019) was only
14% up on the existing £700m trickle-down, the giveaway was
increased to £1bn.5
What about the grassroots?
4 http://www.bbc.co.uk/sport/0/football/31357409
5 http://www.bbc.co.uk/sport/0/football/32077356
6 http://www.theguardian.com/football/2015/sep/09/government-levy-premier-league-tv-money-minister
I
In September 2015, John Whittingdale, the Secretary of State
for Culture, Media and Sport, told a committee of MPs:
“If the Premier League absolutely refuses to increase the
amount of money that passes down through the system to the
benefit of grassroots sport, then I think we would certainly look
at what options we have available to us to ensure that is the
outcome.
“I hope that can be avoided. It would be perfectly possible for
the Government to intervene to achieve that outcome, maybe
through a levy.” 6
Premier League chief executive Richard Scudamore told
BBC Sport:
"Clubs understand that the number one strategic priority is to
keep the stadiums full.
"They also need to understand that young fans must be
encouraged to attend games. The clubs will do the right thing.”
11
There has been little clarity about how much of the TV rights
windfall the Premier League will give away to the community
clubs, schools and other parts of what most fans would
consider the grassroots7
Under the new TV rights deal, according to The Guardian,
relegated clubs will receive 55% of the equal share of
broadcast revenue paid to Premier League clubs in the first
year after relegation, 45% in the following year, and 20% in
year three.
While the figures haven’t yet been set, it will mean a massive
increase in the size of the parachute payments because
broadcast revenues will have risen by 71%.
Solidarity payments given to clubs in the Championship and
Leagues One and Two will also go up sharply.
The arguments in favour of these payments highlight that they
enhance competitive balance: for instance, they ensure a
reasonable distribution of talent amongst clubs so the
outcomes of matches and the league is less predictable and
more enjoyable for fans.
Yet the key to achieving this outcome is surely in the
distribution of given amounts of income, not necessarily
increasing absolute amounts of incomes.
What about the grassroots?
7 http://www.theguardian.com/football/2015/jun/02/parachute-payments-clubs-relegated-premier-league
[CONTINUED]
12
Watching the games
This was also, coincidentally, the first
season that BSkyB (as was) began
broadcasting live games.
The Premier League doesn’t even hold
the record for the largest crowds per
match.
That honour goes to Germany’s
Bundesliga with an average of 42,609 in
2014. Sky Deutschland has exclusive
rights to broadcast all live Bundesliga
and Bundesliga 2 matches for the
seasons 2013-14 to 2016-17.8
Average match attendance in England
really hasn’t changed that significantly
over the last sixty years.
nlike all the rest of Europe's top
leagues, UK-based fans don’t have the
choice of watching all games live. And
they only get the ones made available
for broadcast and then selected by Sky
and BT.
From next season there will be only 168
games shown live in the UK out of a
total of 380, yet fans will pay the highest
prices in Europe to watch the games on
TV.
Research recently commissioned by
Virgin Media, and carried out among
more than 1,000 football fans, revealed
three quarters of fans (77%) would like
more live Premier League games
available on TV.
Only 6% said they were able to watch
every match they wanted to on TV at
home.
In the stadiums, average crowds are
high and growing; in the 2013-14 and
2014-15 seasons the figures were
36,670 and 36,179 respectively. These
were record crowd averages in the
Premier League.
Figures will vary depending on the
teams being promoted or relegated, and
the size of their regular support.
In the Premier League era, crowds have
risen steadily from an average of 21,132
in 1992-93.
8 https://info.sky.de/inhalt/eng/medienzentrum-news-uk-17042012-en.jsp
GQRR research of 1000 football fans September 2015 on behalf of Virgin Media http://about.virginmedia.com/press-release/9482/football-fans-demand-more-live-football-on-tv
U
13
Watching the games
Their total crowds were 507,000,
496,000 and 514,000, tiny variations - a
few hundred per home game - which
show live broadcasts have next to no
impact on how many people go to see
their favourites. It is likely that unusually
cold or wet autumns, winters and
springs will account for at least as much
variation.
There has been very little economic
analysis, but one recent paper12
concluded that even without the effect of
the 2016-19 71% increase in live TV
rights, all clubs would be better off if
additional matches were broadcast.13
There was a short period in the 1950s
when crowds for the then Division One
were slightly larger than they are today,
but in only two seasons since an
English league was first contested in
1889 (1949: 38,792 and 1950: 37,284)
have average crowds in the top tier
exceeded the 36,670 average crowds of
the 2013-14 season.9
If football shown live on TV adversely
affected crowd numbers, you could
expect the most popular clubs to report
decreasing attendance. This hasn’t
happened.
In the last three seasons, the clubs
televised most regularly were
Manchester Utd and Liverpool FC, each
appearing sixty times on screen.10
The variation in their attendances for
those seasons was negligible.
For Manchester Utd, they ranged from
1.435m in the 2012-13 season to
1.428m in 2013-14 and 1.431m in 2014-
15. Liverpool FC’s total attendances
were 850,000, 848,000 and 848,000
respectively.11
Manchester Utd is also the best
attended club in the history of the
Premier League, as well as the most
televised.
There is even stronger evidence to
suggest that being televised doesn’t
affect crowds. Stoke City appeared
nineteen times in the last three full
seasons, making them the least popular
choice with TV producers.
9 http://www.european-football-statistics.co.uk/attn/nav/attnengleague.htm
10 http://www.mirror.co.uk/sport/football/news/ever-wondered-premier-league-teams-3947285
11 http://www.worldfootball.net/attendance/eng-premier-league-2014-2015/1/
12 http://footballperspectives.org/broadcasting-live-matches-and-stadium-attendance
13 http://www.tandfonline.com/doi/abs/10.1080/13571516.2012.643668 “…restrictions on quantity stemming from collective arrangements are detrimental to the consumers, broadcasters, and clubs themselves.”
[CONTINUED]
14
“It is, in fact, doubtful whether closed periods are capable of
encouraging attendance at matches and participation in
matches. Both activities have a completely different quality
to the following of a live transmission on television. It has not
been adequately shown to the Court that the closed periods
actually encourage attendance at and participation in
matches.
Indeed, there is evidence to refute this claim: for example, in
an investigation of the closed periods under competition law
the Commission found that only 10 of 22 associations had
actually adopted a closed period. No closed periods were
adopted in France, Germany, Italy and Spain, or in Northern
Ireland, that is to say, within the sphere of influence of
English football.
Furthermore, in Germany today all Bundesliga matches are
evidently transmitted live without attendance at matches in
the top two leagues suffering as a result.”
With almost 14m people passing through the turnstiles each
season, the Premier League already boasts the highest
aggregate attendance of any league in the world14
It is also argued that increasing the supply of live games on TV
would disproportionately affect stadium attendance at lower
league games.
Yet in Germany, attendance at Bundesliga 2 is growing; the
2013-14 season average was 17,853, the highest in the world
at this level.
So why is there such a restriction on how many live games are
broadcast?
The blackout of matches on a Saturday between 14:45 and
17:15 in the UK is a tradition in English football, but is it making
the difference it’s meant to?
The Advocate General at the Court of Justice of the European
Union Juliane Kokott doesn’t think so. Her opinion in the 2011
Portsmouth landlady case (Fig. 4) revealed she was doubtful
Watching the games
Fig. 4 Football Association Premier League Ltd and Others v QC Leisure and Others (C-403/08) and Karen Murphy v Media Protection Services Ltd (C-429/08) http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:62008CC0403
14 www.dailymail.co.uk/sport/football/article-2835752/Bundesliga-pips-Premier-League-attendance-table-recording-second-biggest-average-global-professional-sport-NFL.html
Fig. 4 Opinion of Juliane Kokott, Advocate General, 3 February 2011
[CONTINUED]
15
That equates to £211m for three years’ worth of games.
French and Moroccan fans will therefore be able to watch all
1,140 games compared to the 504 available to fans here.
Meaning UK providers paid 2,276% more money for 55%
fewer games.16
The Al Jazeera-owned broadcaster BeIN Sports broadcasts
the Premier League in territories across the Middle East and
North Africa. It recently negotiated to retain the live TV rights to
all 380 Premier League games a season for the next three
years.17
NBC recently extended Premier League's US deal to the 2021-
22 season for a supposed $1bn (£641m). NBC will show all
380 Premier League games each season. That’s every match
broadcast live for the next six years18
K football fans pay at least twice as much as fans in Europe to
watch half the number of games.
When asked about this arrangement in a survey carried out for
Virgin Media, 72% of fans surveyed branded it unfair and 73%
said they would watch more games if they were available on
TV.
We all know what we will get from the Premier League: 168
games televised live per season out of the 380 games
available, and bought by BT and Sky for £5.136bn for three
years.15
How does that compare to other countries which can watch
Premier League games?
Altice (Numericable-SFR) has secured rights from Vivendi
(Canal +) to broadcast all 380 Premier League games in
France and Monaco, and is expected to pay around €100m
(£70.3m) a year for the next three seasons starting in August
2016.
How many games?
15 http://www.bbc.co.uk/sport/0/football/31357409
16 http://www.ibtimes.co.uk/premier-league-altice-group-wins-french-broadcasting-rights-1530726
17 https://www.soccerex.com/news/2015/11/bein-sports-retains-premier-league-mena-rights
18 http://www.theguardian.com/football/2015/aug/10/nbc-extends-premier-leagues-us-deal-through-to-2021-22-season
GQRR research of 1000 football fans September 2015 on behalf of Virgin Media http://about.virginmedia.com/press-release/9482/football-fans-demand-more-live-football-on-tv
U
16
hat else could you get for the amount of investment paid to the
Premier League by TV companies? How about almost all of
BBC television, itself a major contributor to the UK’s creative
economy?
The Premier League will take £1.78bn from BT and Sky each
season, and the BBC’s Annual Report and Accounts 2014/15
reveal that the same amount is typically spent on all its
television programming.19
That’s thousands of hours of television: from Sherlock to
Strictly.
BT and Sky will pay the equivalent annual sum for just 504
hours of television (about 21 days)20 - and probably fewer
when you take editorial and broadcast into account
Football spending vs other spending for TV
19 http://downloads.bbc.co.uk/annualreport/pdf/2014-15/BBC-FS-2015.pdf
20 http://www.bbc.co.uk/sport/0/football/31357409
W
Enders Analysis report: Premier League auction over, regulatory questions remain (2015-022)
1.5 series of
Wolf HallPremier League game =
Sky’s £11m per game is roughly
half the total budget of its big show
Fortitude
BT’s annual spend on Premier League football
could fund BBC3 in its entirety for
3 years
1
17
verage audience size for live games in the Premier League
don’t reflect the large amounts of money paid for TV rights
(see Fig. 4).
In fact, Sky’s cost per viewer of TV rights has gone up from
£400 in 2009-10 to £738 in 2014-15.21
Even if Sky smashes its record viewership performance of
2011-12 to attract an audience average of 1.5m per game in
2016-17, its cost per viewer will still rocket to £928.22
If viewing behaviour were to mirror last season’s 1.029m
average, the cost would rise to £1,352 per viewer23, an
increase of 238% over seven years.
For the secondary broadcasters, the cost per viewer was £441
for Setanta in its first season and £412 for BT last season. In
between, it has fallen as low as £128 per viewer for ESPN in
2011-12
TV audience and the economics of the auction
Fig. 5 Average viewers per game (000)
21 Virgin Media calculation based on dividing the cost of rights in that season by the average viewer per game in that season
22 23 Virgin Media calculation of the new rights deal cost to Sky, divided by a hypothetical average audience
Fig 5: Ender’s Analysis report: Football and the wider game (2015-024)
A
1,064 1,051
1,094
1,204
1,308
1,165 1,200
1,029
297
396
297 297 297 297 297
595
0
200
400
600
800
1,000
1,200
1,400
Sky Sports Other
18
here is no doubt that the Premier League brings a huge
amount of entertainment, drama and, of course, sporting
action to football fans.
But fans are also consumers; should they not be better off
when two big rivals like Sky and BT compete for their custom?
The consumer is paying more, is not able to watch all the live
games on TV, and is not getting a fair share of the benefits
from TV rights deals.
It’s often said that the Premier League, as a competition, is in
a class of its own.
What isn’t said often enough is that, in its auction of live TV
rights, the kind of competition managed by the Premier League
isn’t working.
The fans have become lost in the financial excess. The
Premier League’s auction should be shown the red card; the
time has come for a better deal
Conclusion
T
19
http://www.virginmedia.com
.Since the invention of the internet, digital technology has affected the way we live.
As a leading communications provider it’s not just the technology that interests us –
what matters is how it can improve the lives and prospects of everyone who uses it.
It’s true that, with the power of digital at everyone’s fingertips, some things can
happen we don’t like and we all need to work together to minimise them. But the
overwhelming response we hear from people is that digital technology is having an
exciting, positive effect on all our lives.
We believe in digital that makes good things happen for people, communities and
businesses. We do everything we can to ensure technology is used as a force for
good. This is why we’re committed to providing the best guidance, support and
services.
As the UK’s first provider of all four broadband, TV, mobile phone and home phone
services, we champion this cause with everyone who can help make sure that our
collective digital future is good for everyone.
Our growing cable network – the result of multi-billion pound private investment –
already delivers ultrafast broadband to over half of all UK homes, with speeds of up
to 200Mbps, as well as market-leading connectivity to thousands of public and
private sector organisations across the country.
We continue to evolve what is the most advanced interactive television service in
the country, bringing together broadcast TV, thousands of hours of TV On Demand
and the best of the web in a single set-top box powered by TiVo®. We were even
the first to offer HD TV and 3D On Demand to millions of British households.
Virgin Mobile was launched over a decade ago as the world’s first virtual mobile
network, and we’re also one of the largest fixed-line home phone providers.
In October 2015, UPC Ireland became part of Virgin Media.
Virgin Media is now wholly owned by Liberty Global plc, the world’s largest
international cable company. Together we serve 27 million customers across 14
countries, helping connect people to the digital world and enabling them to discover
and experience its extraordinary possibilities.
About Virgin Media
Cover: iStock photo
Contact
Press Office
Virgin Media
Griffin House
161 Hammersmith Road
Hammersmith
London W6 8BS
Email: press@virginmedia.co.uk
Tel: 03330 00 2900

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#MoreBall for UK Football Fans

  • 1. #MoreBalls For UK Football Fans
  • 2. 2 N Foreword obody can deny the success of football. It’s a credit to the UK at home and overseas. The Premier League is a phenomenon; a rich cultural history, a cast of international and talented stars, and an unsurpassed worldwide appeal. And a recent economic assessment report by Ernst & Young showed the substantial contribution that the Premier League makes to the UK economy. In February 2015, the Premier League delivered another record- breaking deal in the sale of domestic TV rights. It had auctioned three years’ worth of live broadcast TV rights for £5.136bn; a 71% increase on the previous deal. The deal, however, rightly raises questions about whether those farthest from the top, the grassroots and the fans, will benefit sufficiently from the windfall. The key question is whether the benefit delivered outweighs the consumer harm. This report examines the facts.
  • 3. 3 Based on last season (2014-15) Premier League 2016/19 domestic live TV rights for the Premier League Foreword The way the Premier League auctions live TV rights is at the heart of the issue. It sells them on an exclusive basis and restricts the number of games broadcast in the UK and so the wholesale and retail costs increase. Virgin Media is the only pay TV provider offering all available live games in one place; we buy the football channels wholesale from BT and Sky. We lodged a formal complaint with the UK media regulator Ofcom and, in November 2014, it opened an investigation; it has been investigating our complaint for over a year. I am convinced there is a better deal for football, for fans, and for the TV business. I hope this report will help shape an informed debate TOM MOCKRIDGE CHIEF EXECUTIVE VIRGIN MEDIA December 2015 [CONTINUED]
  • 4. 4 The Premier League, TV rights and viewing costs he Premier League is the top of any division when it comes to negotiating TV rights. Since it was formed in 1992 the cost of domestic live TV rights per season has grown from £43m to £1.78bn, an increase in value of more than 4,000% Fig 1: Prepared by Virgin Media Fig 1. The cost (£m) per season of domestic live TV rights deals: 1992-2019 T 43 186 461 376 626 651 1,066 1,780 0 500 1,000 1,500 2,000 £m 1992- 1997 1997- 2001 2001- 2004 2004- 2007 2007- 2010 2010- 2013 2013- 2016 2016- 2019 Growth 2016-19 Sky 191 670 1,200 1,024 1,314 1,623 2,280 4,176 1,896 83% Setanta/ESPN/BT 392 159 738 960 222 30% Live Matches 191 670 1,200 1,024 1,706 1,782 3,018 5,136 2,118 71% Highlights 23 73 183 105 172 172 180 204 24 14% Domestic 214 743 1,383 1,129 1,878 1,954 3,198 5,340 2,142 67% Overseas 40 98 178 325 625 1,437 2,233 2,903 670 30% Total 253 841 1,561 1,454 2,503 3,391 5,431 8.243 2.812 52% Number of years 5 4 3 3 3 3 3 3 Domestic 43 186 461 376 626 651 1,066 1,780 714 67% Overseas 8 25 59 108 208 479 744 968 223 30% Average per year 51 210 520 485 834 1,130 1,180 2,748 937 52%
  • 5. 5 UK LIVE Equal Share £ Facility fees £ Merit payment £ Overseas TV £ Central commercial £ Total payment £ Chelsea 25 21,968,793 19,928,800 24,897,960 27,757,371 4,392,630 98,999,554 Manchester City 26 21,968,793 20,729,976 23,653,062 27,757,371 4,392,630 98,501,832 Arsenal 25 21,968,793 19,982,800 22,408,164 27,757,371 4,392,630 96,509,758 Manchester United 27 21,968,793 21,477,152 21,163,266 27,757,371 4,392,630 96,759,212 Tottenham Hotspur 18 21,968,793 14,752,568 19,918,368 27,757,371 4,392,630 88,789,730 Liverpool 25 21,968,793 19,928,800 18,673,470 27,757,371 4,392,630 92,775,064 Southampton 13 21,968,793 11,016,688 17,428,572 27,757,371 4,392,630 82,564,054 Swansea City 12 21,968,793 10,269,512 16,183,674 27,757,371 4,392,630 80,571,980 Stoke City 10 21,968,793 8,772,160 14,938,776 27,757,371 4,392,630 77,832,730 Crystal Palace 11 21,968,793 9,522,336 13,693,878 27,757,371 4,392,630 77,335,008 Everton 17 21,968,793 14,005,392 12,448,980 27,757,371 4,392,630 80,573,166 West Ham United 13 21,968,793 11,016,688 11,204,082 27,757,371 4,392,630 76,339,564 W Bromwhich Albion 10 21,968,793 8,775,160 9,959,184 27,757,371 4,392,630 72,853,138 Leicester City 10 21,968,793 8,775,160 8,714,826 27,757,371 4,392,630 71,608,240 Newcastle United 20 21,968,793 16,246,920 7,469,388 27,757,371 4,392,630 77,835,102 Sunderland 11 21,968,793 9,522,336 6,224,490 27,757,371 4,392,630 69,865,620 Aston Villa 11 21,968,793 9,522,336 4,979,592 27,757,371 4,392,630 68,620,722 Hull City 10 21,968,793 8,775,160 3,734,694 27,757,371 4,392,630 66,628,648 Burnley 10 21,968,793 8,775,160 2,489,796 27,757,371 4,392,630 65,383,750 Queens Park Rangers 11 21,968,793 9,522,336 1,244,898 27,757,371 4,392,630 64,886,028 £439,375,860 £261,428,440 £261,428,580 £555,147,420 £87,582,600 £1,605,232,900 TV rights and the clubs he money available to Premier League clubs from TV rights deals is significant. Apart from domestic rights, there are also huge international deals (see Fig. 1). For example, a six- year package sold to NBC this summer, for US rights only, is understood to have brought in around $1bn (£600m), an increase of around 60% on the last deal.1 Overseas TV deals for 2016-19 are estimated to increase by 30% in total once all auctions are complete. Adding together the growth in domestic and international rights sales, and using Fig. 2 as a reference point, we can estimate that by the first year of the new UK TV rights deal (2016-17 season), the top club in the Premier League is likely to receive about £152m and the bottom club £92m. Fig 2. Premier League TV & prize money in 2014-15 season, by order in leagueT 1 http://www.forbes.com/sites/bobbymcmahon/2015/08/16/will-new-nbc-premier-league-rights-deal-bring-some-fan-friendly-kick-off-times-for-us-based-fans Fig 2: http://www.mirror.co.uk/sport/football/news/premier-league-clubs-profits-soar-5817486 (NB: half the domestic funds are split evenly between 20 Clubs, 25% is split among clubs depending on how many times they appeared on television and the remaining 25% is awarding in a sliding scale according to where they finished in the table. 100% of the Overseas TV rights are split evenly as are all other commercial rights held by the league eg to merchandise etc)
  • 6. 6 TV rights and the clubs For all its wealth, the Premier League seems to have had a negative effect on the fortunes of England’s national team. It’s struggled to make headway at recent World Cup and European Championship tournaments. The growth in income for the Premier League has encouraged clubs to spend ever-increasing sums on talent and, though clubs invest heavily in academies, their primary purpose is to find the best talent – rather than develop a strong national team. This was however supposed to be a benefit from establishing the League back in 1992, but it has never happened https://en.wikipedia.org/wiki/List_of_European_Cup_and_UEFA_Champions_League_finals http://www.fifa.com/fifa-world-ranking/associations/association=eng/men/index.html [CONTINUED] 9 England FIFA world ranking 2015 10 England average ranked position since 1992 Football fans and TV subscribers are entitled to ask how the money affects team performance. In the period since the Premier League was founded (1992) there have been four English victories: Manchester United 1999, Liverpool 2005, Manchester United 2008, and Chelsea 2012. In the same period, the competition was won nine times by Spanish clubs and five times by Italian clubs: both operate on much lower revenues from TV rights. Chelsea was the most recent Champions League finalist, and also the winner, in 2012. But in the last several seasons, Premier League teams have been off the pace in Europe.
  • 7. 7 English clubs are champions of the money league A new pattern of Premier League club ownership has also recently emerged; selling minority stakes to professional investors. This is in part due to the live TV rights deal, but it’s combined with a greater degree of cost control arising from the 2011 Financial Fair Play rules. In the last few months, a consortium led by private equity groups China Media Capital and CITIC Capital paid $400m for a 13% stake in Manchester City2, Chicago-based PEAK6 bought a 25% stake in AFC Bournemouth, and Americans Harris and Blitzer each settled on an 18% stake in Crystal Palace.3 n the first season during which the current £3.01bn three-year TV rights deal took effect, most of the windfall went to those who already had the most: the players and their agents. That first season (2013-14), spending on salaries leapt from an average of £1.6m to £2.3m a year per player. That’s a 44% rise. The Premier League leads the way in paying players. That great leap for UK footballers puts them far ahead of Germany’s Bundesliga, where players earn an average £1.5m a year (see Fig. 3). The Bundesliga’s average weekly salary of £28,011 is 36% lower than the £43,717 received each week in England. And that’s before we consider the effect on UK salaries from the 71% hike in live TV rights taking effect next season (2016). 2 http://www.ft.com/cms/s/0/feb69226-9803-11e5-95c7-d47aa298f769.html?siteedition=uk#axzz3t9kcJsTo 3 http://www.ft.com/cms/s/2/592e9bc2-8f9e-11e5-8be4-3506bf20cc2b.html#axzz3t9kcJsTo http://www.telegraph.co.uk/sport/football/competitions/premier-league/11231076/Average-Premier-League-salary-rockets-to-2.3m-as-clubs-TV-windfall-goes-straight-into-players-pockets.html www.sportingintelligence.com I Premier League’s average annual salary £2.3m
  • 8. 8 The overall income of Premier League clubs is already greater than clubs in all other football leagues. English clubs averaged an annual income of £155m in 2013- 14. The Bundesliga came second at £90m per club; 58% lower. Both Serie A and La Liga clubs had revenues on average less than half those of Premier League, and French clubs got less than a third (see Fig. 3). The Premier League also tops the table of wage payments. Other European leagues are able to attract world class talent, so how much of a premium does the Premier League need? English clubs are champions of the money league Fig 3. Top 10 average player wage and club income 2013-14 Fig 3: http://www.dailymail.co.uk/sport/football/article-2833020/Premier-League-wages-dwarf-Europe-flight-players-England-earning-average-2-3million-year.html Rank Country League Average player wage per yr (£) Average wage / week (£) Average club income / yr (£m) 1 England Premier League 2,273,277 43.717 155.0 2 Germany Bundesliga 1,456,565 28.011 90.0 3 Italy Serie A 1,313,681 25,263 71.7 4 Spain La Liga 1,213,024 23,327 77.5 5 France Ligue 1 987,933 18,999 48.3 6 Russia Premier League, RUS 901,600 17,338 46.7 7 Brazil Campeonato Serie A 583,333 11,218 35.6 8 England Championship 486,033 9,347 20.8 9 Turkey Super Lig, TUR 446,056 8,578 25.8 10 Mexico Liga MC, MEX 265,625 5,108 22.6 [CONTINUED]
  • 9. 9 eloitte reported in June 2015 that match day revenues in the Premier League increased last season by 5% to £616m. Far from going down as a result of money pouring in from TV rights, the cost of watching football in a stadium is going up. The benefits of ever-increasing TV income have not helped to reduce the cost of match day prices for fans. Are loyal fans being rewarded? There is no indication that this disparity will end anytime soon Cash in, cash out? The BBC Price of Football survey 2015: Deloitte: Revolution Annual Review of Football Finance – Highlights June 2015. https://www2.deloitte.com/content/dam/Deloitte/global/Documents/About-Deloitte/gx-deloitte-uk-arff-2015-highlights.pdf BBC Sport Price of Football Survey: http://www.bbc.co.uk/news/uk-34507719 D Match Day Ticket Arsenal most expensive in the Premier League Chelsea cheapest in the Premier League Season Ticket Arsenal most expensive in the Premier League Stoke City cheapest in the Premier League £97 £52 £1,014 £294
  • 10. 10 Many remain unimpressed with the gesture. Mr Whittingdale also pointed out that the bulk of the money given away by the Premier League went to clubs like Fulham and QPR in the form of parachute payments - introduced to help relegated clubs absorb the huge losses in revenue that accompany dropping out of the Premier League. n February 2015, when the Premier League announced the £5.136bn three-year deal for live TV rights, it said that £56m a year “has been earmarked for grassroots projects, including 50 artificial pitches”.4 Overall, including the payments the Premier League makes to other clubs in the lower leagues, Richard Scudamore said that some £800m would be trickled down over the three years of the new deal.4 After analysts pointed out that £800m of an estimated £8bn in global TV rights income (between 2016 and 2019) was only 14% up on the existing £700m trickle-down, the giveaway was increased to £1bn.5 What about the grassroots? 4 http://www.bbc.co.uk/sport/0/football/31357409 5 http://www.bbc.co.uk/sport/0/football/32077356 6 http://www.theguardian.com/football/2015/sep/09/government-levy-premier-league-tv-money-minister I In September 2015, John Whittingdale, the Secretary of State for Culture, Media and Sport, told a committee of MPs: “If the Premier League absolutely refuses to increase the amount of money that passes down through the system to the benefit of grassroots sport, then I think we would certainly look at what options we have available to us to ensure that is the outcome. “I hope that can be avoided. It would be perfectly possible for the Government to intervene to achieve that outcome, maybe through a levy.” 6 Premier League chief executive Richard Scudamore told BBC Sport: "Clubs understand that the number one strategic priority is to keep the stadiums full. "They also need to understand that young fans must be encouraged to attend games. The clubs will do the right thing.”
  • 11. 11 There has been little clarity about how much of the TV rights windfall the Premier League will give away to the community clubs, schools and other parts of what most fans would consider the grassroots7 Under the new TV rights deal, according to The Guardian, relegated clubs will receive 55% of the equal share of broadcast revenue paid to Premier League clubs in the first year after relegation, 45% in the following year, and 20% in year three. While the figures haven’t yet been set, it will mean a massive increase in the size of the parachute payments because broadcast revenues will have risen by 71%. Solidarity payments given to clubs in the Championship and Leagues One and Two will also go up sharply. The arguments in favour of these payments highlight that they enhance competitive balance: for instance, they ensure a reasonable distribution of talent amongst clubs so the outcomes of matches and the league is less predictable and more enjoyable for fans. Yet the key to achieving this outcome is surely in the distribution of given amounts of income, not necessarily increasing absolute amounts of incomes. What about the grassroots? 7 http://www.theguardian.com/football/2015/jun/02/parachute-payments-clubs-relegated-premier-league [CONTINUED]
  • 12. 12 Watching the games This was also, coincidentally, the first season that BSkyB (as was) began broadcasting live games. The Premier League doesn’t even hold the record for the largest crowds per match. That honour goes to Germany’s Bundesliga with an average of 42,609 in 2014. Sky Deutschland has exclusive rights to broadcast all live Bundesliga and Bundesliga 2 matches for the seasons 2013-14 to 2016-17.8 Average match attendance in England really hasn’t changed that significantly over the last sixty years. nlike all the rest of Europe's top leagues, UK-based fans don’t have the choice of watching all games live. And they only get the ones made available for broadcast and then selected by Sky and BT. From next season there will be only 168 games shown live in the UK out of a total of 380, yet fans will pay the highest prices in Europe to watch the games on TV. Research recently commissioned by Virgin Media, and carried out among more than 1,000 football fans, revealed three quarters of fans (77%) would like more live Premier League games available on TV. Only 6% said they were able to watch every match they wanted to on TV at home. In the stadiums, average crowds are high and growing; in the 2013-14 and 2014-15 seasons the figures were 36,670 and 36,179 respectively. These were record crowd averages in the Premier League. Figures will vary depending on the teams being promoted or relegated, and the size of their regular support. In the Premier League era, crowds have risen steadily from an average of 21,132 in 1992-93. 8 https://info.sky.de/inhalt/eng/medienzentrum-news-uk-17042012-en.jsp GQRR research of 1000 football fans September 2015 on behalf of Virgin Media http://about.virginmedia.com/press-release/9482/football-fans-demand-more-live-football-on-tv U
  • 13. 13 Watching the games Their total crowds were 507,000, 496,000 and 514,000, tiny variations - a few hundred per home game - which show live broadcasts have next to no impact on how many people go to see their favourites. It is likely that unusually cold or wet autumns, winters and springs will account for at least as much variation. There has been very little economic analysis, but one recent paper12 concluded that even without the effect of the 2016-19 71% increase in live TV rights, all clubs would be better off if additional matches were broadcast.13 There was a short period in the 1950s when crowds for the then Division One were slightly larger than they are today, but in only two seasons since an English league was first contested in 1889 (1949: 38,792 and 1950: 37,284) have average crowds in the top tier exceeded the 36,670 average crowds of the 2013-14 season.9 If football shown live on TV adversely affected crowd numbers, you could expect the most popular clubs to report decreasing attendance. This hasn’t happened. In the last three seasons, the clubs televised most regularly were Manchester Utd and Liverpool FC, each appearing sixty times on screen.10 The variation in their attendances for those seasons was negligible. For Manchester Utd, they ranged from 1.435m in the 2012-13 season to 1.428m in 2013-14 and 1.431m in 2014- 15. Liverpool FC’s total attendances were 850,000, 848,000 and 848,000 respectively.11 Manchester Utd is also the best attended club in the history of the Premier League, as well as the most televised. There is even stronger evidence to suggest that being televised doesn’t affect crowds. Stoke City appeared nineteen times in the last three full seasons, making them the least popular choice with TV producers. 9 http://www.european-football-statistics.co.uk/attn/nav/attnengleague.htm 10 http://www.mirror.co.uk/sport/football/news/ever-wondered-premier-league-teams-3947285 11 http://www.worldfootball.net/attendance/eng-premier-league-2014-2015/1/ 12 http://footballperspectives.org/broadcasting-live-matches-and-stadium-attendance 13 http://www.tandfonline.com/doi/abs/10.1080/13571516.2012.643668 “…restrictions on quantity stemming from collective arrangements are detrimental to the consumers, broadcasters, and clubs themselves.” [CONTINUED]
  • 14. 14 “It is, in fact, doubtful whether closed periods are capable of encouraging attendance at matches and participation in matches. Both activities have a completely different quality to the following of a live transmission on television. It has not been adequately shown to the Court that the closed periods actually encourage attendance at and participation in matches. Indeed, there is evidence to refute this claim: for example, in an investigation of the closed periods under competition law the Commission found that only 10 of 22 associations had actually adopted a closed period. No closed periods were adopted in France, Germany, Italy and Spain, or in Northern Ireland, that is to say, within the sphere of influence of English football. Furthermore, in Germany today all Bundesliga matches are evidently transmitted live without attendance at matches in the top two leagues suffering as a result.” With almost 14m people passing through the turnstiles each season, the Premier League already boasts the highest aggregate attendance of any league in the world14 It is also argued that increasing the supply of live games on TV would disproportionately affect stadium attendance at lower league games. Yet in Germany, attendance at Bundesliga 2 is growing; the 2013-14 season average was 17,853, the highest in the world at this level. So why is there such a restriction on how many live games are broadcast? The blackout of matches on a Saturday between 14:45 and 17:15 in the UK is a tradition in English football, but is it making the difference it’s meant to? The Advocate General at the Court of Justice of the European Union Juliane Kokott doesn’t think so. Her opinion in the 2011 Portsmouth landlady case (Fig. 4) revealed she was doubtful Watching the games Fig. 4 Football Association Premier League Ltd and Others v QC Leisure and Others (C-403/08) and Karen Murphy v Media Protection Services Ltd (C-429/08) http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=CELEX:62008CC0403 14 www.dailymail.co.uk/sport/football/article-2835752/Bundesliga-pips-Premier-League-attendance-table-recording-second-biggest-average-global-professional-sport-NFL.html Fig. 4 Opinion of Juliane Kokott, Advocate General, 3 February 2011 [CONTINUED]
  • 15. 15 That equates to £211m for three years’ worth of games. French and Moroccan fans will therefore be able to watch all 1,140 games compared to the 504 available to fans here. Meaning UK providers paid 2,276% more money for 55% fewer games.16 The Al Jazeera-owned broadcaster BeIN Sports broadcasts the Premier League in territories across the Middle East and North Africa. It recently negotiated to retain the live TV rights to all 380 Premier League games a season for the next three years.17 NBC recently extended Premier League's US deal to the 2021- 22 season for a supposed $1bn (£641m). NBC will show all 380 Premier League games each season. That’s every match broadcast live for the next six years18 K football fans pay at least twice as much as fans in Europe to watch half the number of games. When asked about this arrangement in a survey carried out for Virgin Media, 72% of fans surveyed branded it unfair and 73% said they would watch more games if they were available on TV. We all know what we will get from the Premier League: 168 games televised live per season out of the 380 games available, and bought by BT and Sky for £5.136bn for three years.15 How does that compare to other countries which can watch Premier League games? Altice (Numericable-SFR) has secured rights from Vivendi (Canal +) to broadcast all 380 Premier League games in France and Monaco, and is expected to pay around €100m (£70.3m) a year for the next three seasons starting in August 2016. How many games? 15 http://www.bbc.co.uk/sport/0/football/31357409 16 http://www.ibtimes.co.uk/premier-league-altice-group-wins-french-broadcasting-rights-1530726 17 https://www.soccerex.com/news/2015/11/bein-sports-retains-premier-league-mena-rights 18 http://www.theguardian.com/football/2015/aug/10/nbc-extends-premier-leagues-us-deal-through-to-2021-22-season GQRR research of 1000 football fans September 2015 on behalf of Virgin Media http://about.virginmedia.com/press-release/9482/football-fans-demand-more-live-football-on-tv U
  • 16. 16 hat else could you get for the amount of investment paid to the Premier League by TV companies? How about almost all of BBC television, itself a major contributor to the UK’s creative economy? The Premier League will take £1.78bn from BT and Sky each season, and the BBC’s Annual Report and Accounts 2014/15 reveal that the same amount is typically spent on all its television programming.19 That’s thousands of hours of television: from Sherlock to Strictly. BT and Sky will pay the equivalent annual sum for just 504 hours of television (about 21 days)20 - and probably fewer when you take editorial and broadcast into account Football spending vs other spending for TV 19 http://downloads.bbc.co.uk/annualreport/pdf/2014-15/BBC-FS-2015.pdf 20 http://www.bbc.co.uk/sport/0/football/31357409 W Enders Analysis report: Premier League auction over, regulatory questions remain (2015-022) 1.5 series of Wolf HallPremier League game = Sky’s £11m per game is roughly half the total budget of its big show Fortitude BT’s annual spend on Premier League football could fund BBC3 in its entirety for 3 years 1
  • 17. 17 verage audience size for live games in the Premier League don’t reflect the large amounts of money paid for TV rights (see Fig. 4). In fact, Sky’s cost per viewer of TV rights has gone up from £400 in 2009-10 to £738 in 2014-15.21 Even if Sky smashes its record viewership performance of 2011-12 to attract an audience average of 1.5m per game in 2016-17, its cost per viewer will still rocket to £928.22 If viewing behaviour were to mirror last season’s 1.029m average, the cost would rise to £1,352 per viewer23, an increase of 238% over seven years. For the secondary broadcasters, the cost per viewer was £441 for Setanta in its first season and £412 for BT last season. In between, it has fallen as low as £128 per viewer for ESPN in 2011-12 TV audience and the economics of the auction Fig. 5 Average viewers per game (000) 21 Virgin Media calculation based on dividing the cost of rights in that season by the average viewer per game in that season 22 23 Virgin Media calculation of the new rights deal cost to Sky, divided by a hypothetical average audience Fig 5: Ender’s Analysis report: Football and the wider game (2015-024) A 1,064 1,051 1,094 1,204 1,308 1,165 1,200 1,029 297 396 297 297 297 297 297 595 0 200 400 600 800 1,000 1,200 1,400 Sky Sports Other
  • 18. 18 here is no doubt that the Premier League brings a huge amount of entertainment, drama and, of course, sporting action to football fans. But fans are also consumers; should they not be better off when two big rivals like Sky and BT compete for their custom? The consumer is paying more, is not able to watch all the live games on TV, and is not getting a fair share of the benefits from TV rights deals. It’s often said that the Premier League, as a competition, is in a class of its own. What isn’t said often enough is that, in its auction of live TV rights, the kind of competition managed by the Premier League isn’t working. The fans have become lost in the financial excess. The Premier League’s auction should be shown the red card; the time has come for a better deal Conclusion T
  • 19. 19 http://www.virginmedia.com .Since the invention of the internet, digital technology has affected the way we live. As a leading communications provider it’s not just the technology that interests us – what matters is how it can improve the lives and prospects of everyone who uses it. It’s true that, with the power of digital at everyone’s fingertips, some things can happen we don’t like and we all need to work together to minimise them. But the overwhelming response we hear from people is that digital technology is having an exciting, positive effect on all our lives. We believe in digital that makes good things happen for people, communities and businesses. We do everything we can to ensure technology is used as a force for good. This is why we’re committed to providing the best guidance, support and services. As the UK’s first provider of all four broadband, TV, mobile phone and home phone services, we champion this cause with everyone who can help make sure that our collective digital future is good for everyone. Our growing cable network – the result of multi-billion pound private investment – already delivers ultrafast broadband to over half of all UK homes, with speeds of up to 200Mbps, as well as market-leading connectivity to thousands of public and private sector organisations across the country. We continue to evolve what is the most advanced interactive television service in the country, bringing together broadcast TV, thousands of hours of TV On Demand and the best of the web in a single set-top box powered by TiVo®. We were even the first to offer HD TV and 3D On Demand to millions of British households. Virgin Mobile was launched over a decade ago as the world’s first virtual mobile network, and we’re also one of the largest fixed-line home phone providers. In October 2015, UPC Ireland became part of Virgin Media. Virgin Media is now wholly owned by Liberty Global plc, the world’s largest international cable company. Together we serve 27 million customers across 14 countries, helping connect people to the digital world and enabling them to discover and experience its extraordinary possibilities. About Virgin Media Cover: iStock photo Contact Press Office Virgin Media Griffin House 161 Hammersmith Road Hammersmith London W6 8BS Email: press@virginmedia.co.uk Tel: 03330 00 2900