Slightly old news: Premiership Broadcaster goes Bankrupt

The rights to televise English football are remarkably expensive. Back in 1985 the BBC paid £1.3 million to cover 6 matches. In 2007, between them Sky and Setanta paid £1.7bn. However, it hasn’t all been smiles and happiness since then for Setanta. It was by some distance the smaller partner with Sky in broadcasting the Premiership, and this summer it went bankrupt, unable to fulfil its payments to the Premiership and other sporting institutions in the light of falling subscriptions.

The difficulty is that both Sky and Setanta are subscription channels and hence it is unlikely people will fork out two separate subscriptions, especially as Setanta only paid for lesser quality matches (so matches between the big four, for example, would always be on Sky). With the recession kicking in here in the UK, it seems subscriptions were cut back drastically, leaving Setanta unviable.

The upshot now is that ESPN has taken over Setanta’s matches and will broadcast them in the UK in co-operation with Sky. Which naturally raises the question about Sky’s position in broadcasting the Premiership – it appears to monopolise the market, and has done since the early 1990s.

Setanta is the second company that has failed trying to match Sky – ITV Digital went bankrupt in the early part of this decade after aggressively acquiring the rights to many soccer matches and then finding itself unable to fulfil its obligations.

Should something be done to limit Sky’s dominant position? Setanta was unable to afford the rights to the best Premiership matches, which might have meant people were forced to subscribe to Setanta if the most exciting matches were on that station. Economics would say yes, something should be done, but it is hard to see where the consumer gains if he or she has to pay two or more separate, costly subscriptions, to watch the matches that one subscription used to buy. Of course, more competition may mean that Sky cannot afford high subscription rates, and may have to become more innovative in order to retain customer interest.

In Britain, the rights to the World Cup and European Championships are legally restricted to free-to-air channels, the BBC and ITV, and they negatiate on splitting up the matches up to the final, and both stations show the final. Maybe the rights to the Premiership should be sold to a group of companies, with the lesser matches split between networks by some agreement, and the biggest matches can be broadcast on all the channels at the same time?


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