News Corporation chairman and CEO Rupert Murdoch, whose ambitions to control BSkyB could have a profound impact on British sp
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ThE MaStEr
2010-10-12
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Sk/y Sports' big budget dwarfs competitors
News Corporation's proposed £8bn bid for BSk/yB would give the broadcaster an open goal on sports coverage
News Corporation chairman and CEO Rupert Mur/doch, whose ambitions to control BSkyB could have a profound impact on British sports coverage
Sk/y's domination of sport in the UK is now absolute following the collapse of Setanta Sports in June 2009. The satellite broadcaster fought hard to win control of live Premier League football in the 1990s, and with a budget of about £1bn a year it is easily able to outspend rivals, reducing competitors to a handful of events, most of which are restricted by law to free-to-air television.
A tie-up with News Corporation, though, would increase Sky's firepower across Europe. Rival broadcasters fear that Sky in the UK could, in effect, cross-subsidise bids for Champions League football by working with pay-television broadcasters that Rupert Murdoch's company already owns in Italy and controls in Germany – which could eventually set a precedent for joint bids for events like the Olympic Games and World Cup.
S/ky is already easily able to outbid rivals for sports it wants, such as cricket, which is no longer on live on free television after Sk/y paid £50m a year to snatch the rights from Channel 4 (which was only able to bid a third of that sum) a few months before England's home Ashes triumph in 2005. It now transmits all the week's Champions League games, bar one, and only because that was effectively reserved for ITV by European football's governing body Uefa.
Recognising Sky's powers, the European Commission tried to force the Premier League to sell its live television rights to two broadcasters. Setanta, an Irish broadcaster, stepped in, and at one point was showing a third of the matches on offer – but its finances were unable to support the £2.8m a game it paid. Sky pays about £4.7m a game, a cost it can support because of the size of its customer base.
Setanta was replaced by ESPN – part of the Walt Disney group, but although Disney is a large US media group ESPN only shows a sixth of the matches available. The US sports broadcaster has also abandoned Setanta's strategy of selling direct to homes in the UK, preferring to resell through the Sky service, which gives guaranteed revenue but leaves Sky in control of the critical relationship with the customer.
"We knew that Sky was a tough competitor, and they certainly didn't make it easy for us by, for example, refusing let Setanta advertise on Sky Sports," said one former executive of Setanta Sports.
Of the sports rights that remain in the hands of free-to-air broadcasters, many are protected by the existing "crown jewels" legislation that ensures the broadcasting of certain events on free television. That restricts Sk/y's ability to bid against the BBC for Wimbledon and the Grand National and against BBC and ITV for the World Cup – while allowing it to take control of events such as Ryder Cup golf, Ashes cricket and the FA Premier League.
An attempt to widen the definition of "crown jewels" events to include the home Ashes series was shelved in July after the incoming Conservatives chose to abandon a review led by David Davis and commissioned by Labour.
The former Labour culture secretary Ben Bradshaw said that the decision was "payback time for Murd/och to the slavish support given to Tories in the election" – a comment that Conservative sports minister Hugh Robertson called a "complete smear".
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