Will the Premier League kill Major League Soccer?

April 20, 2013

This past week, NBC announced that they will show every single match of the Premier League campaign in the United States beginning at the start of next season, which begins at the end of the summer in 2013.  This means that NBC will literally use its empire of networks to broadcast Premier League games from England during the weekends.  There is even a graphic going around, showing that on May 11th, 2014 – what is referred to as “Championship Sunday” or the last day of the Premier League season – there will be games on the following NBC channels: NBC, NBC Sports, USA, Bravo, CNBC, SyFy, Esquire, MSNBC, E! and so forth.  I’m sorry, but Premier League on SyFy seems to be quite a reach, but NBC has paid $250 million for the 2013 Premier League rights, and they want to do things the right way.  As their press release notes:

Details of the 2013-2014 NBC Sports Group Premier League programming include:

  • All 380 matches presented live on television with studio pre- and post-game coverage;
  • All 380 matches streamed live via NBC Sports Live Extra;
  • Games not aired on a designated NBCUniversal channel will be made available to distributors via Premier League Extra Time, a package of overflow television channels available at no extra cost for each of their customers who receives NBC Sports Network;
  • Championship Sunday – May 11, 2014, when all 10 Premier League matches will be available live on a different NBCUniversal channel;
  • 76 Spanish-language telecasts, 10 on Telemundo, 66 on Mun2;
  • More than 600 hours of Premier League original programming.

NBC SPORTS LIVE EXTRA: Every Barclays Premier League match will be streamed live via NBC Sports Live Extra, the NBC Sports Group’s live streaming product for desktop, mobile and tablets and, in most cases, on the digital platforms of participating cable, satellite, telco and other video subscription services. The vast majority of Barclays Premier League matches will be streamed via “TV Everywhere,” available on an authenticated basis to subscribers of these services.

NBC happens to have the rights for Major League Soccer as well, which they pay $10 million a year for.  In this current deal, NBC shows usually one or two MLS matches a week, with the Premier League they will be showing around 10 matches a week through the season.  Some people have discussed that the deal would be beneficial for MLS, as it would draw more soccer fans to the NBC network who could then carry over watching Premier League matches to MLS matches.  I believe that this logic doesn’t fully fit.  First, the MLS matches would usually not transition smoothly with the Premier League, unless the MLS started playing at 10 or 11am, which would mean much less fans in the stadium.  At this point in time, fans in the stadium are the lifeblood of the MLS, as the revenues from television, once distributed, aren’t even worth a quarter of a team’s salaries for a season.  In this, the Premier League may not kill the MLS, but could draw some major attention away from the professional soccer in the U.S.

Time will tell how this deal affects MLS, but I personally think obtaining the Premier League rights was a great move by NBC.  For many years, I was part of a that crowd of people who paid extra money to get Fox Soccer on their cable plans to watch matches early on Saturdays.  Now, NBC will bring the Premier League to a national audience on over-the-air channels, meaning that people can watch certain Premier League matches without paying.  I think that this move could really help heighten the popularity of the Premier League, though I’d be curious to see how well ratings do on NBC during college football season.  The games wouldn’t overlap, but I am not sure how many college football fans will turn on their television sets early to catch Fulham play Everton.


NBC Coverage and the Olympics

August 6, 2012

For most of the world, the Olympics has been a wonderful live sporting event.  For the United States, it has mostly been enjoyed via the wonders of tape delay.  I personally use a mix of Japanese television streaming and NBC live streaming to try and watch most of the events on the internet, but that came to a stop today as the NBC online stream pretty much died right as the men’s 100 meter final was about to take place.  Some were thinking that NBC didn’t want to show the live event, so everyone would have to tune in to the tape-delayed coverage in the evening.

So here I sit in front of the TV waiting to watch the men’s 100 meters (which I will not say what happens for those who don’t know the result).  In fact, some metrics are claiming that around 2 billion people worldwide viewed the men’s 100 meter final live.  This article discusses the viewership (Spoiler alert: it tells you who wins the 100 meters) and how NBC denied the ability to watch the moment live in the U.S.  This would normally seem to make the Olympics less desirable for viewers, as the Uncertainty of Outcome hypothesis notes that for a match where fans can easily predict the outcome, fans will be less likely to attend that match.  NBC researchers seem to be finding the exact opposite of this, saying that viewers who know what is going to happen have been more likely to tune into the Olympics.  I think that they may just be capturing those fans who would watch the Olympics no matter what, and are checking the outcome of matches before hand because they want to know what happens, as it happens. It is also likely, that because the NBC has been heavily editing programming to show Americans winning, that Americans are more likely to tune in because they really are nationalistic and want to see the U.S. win those golds!  NBC has been crafty though, they heavily edited the women’s gymnastic team finals in the U.S., removing an early fall and mistakes by the Russians to make it look like the competition was neck and neck.  This despite the fact that the U.S. jumped to an early lead and really had no trouble winning the gold for the women’s teams gymnastics.  NBC went as far as to not show point standings throughout the telecast in order to give the sense of drama.  In some sense, even though their research shows uncertainty of outcome might not matter, they are still trying to create it… even when it doesn’t exist.

Also, the Olympics do not really compete with any noteworthy programming at this time of year, so it is a good time to be NBC.  In the previous cycle it was said that NBC potentially lost around $200 million in revenue on the Olympics.  The chairman of NBC noted that there is a chance that the Olympics this cycle might make a profit, as the ratings and ad revenue from the Olympics has been very strong.  NBC is really trying all they can do to get viewers and make money, but some will still be very unhappy about the tape delay and jingoistic coverage of the Olympics.  If you want examples, just head to deadspin or go to twitter and type “NBCFail”.  The number of people using this hashtag is staggering.


Did the “Beckham Experiment” work for the MLS?

November 22, 2011

On Sunday, the Los Angeles Galaxy won 1-0 in the Major League Soccer (MLS) Cup final over the Houston Dynamo.  The Galaxy are lead by U.S. international Landon Donovan, as well as England’s David Beckham and Ireland’s Robbie Keane.  Notably, the game is the last before Beckham’s 5 year contract ends with the MLS.  Now the MLS is a curious league, as it is operated as a single-entity organization where the league holds all the player contracts.  This was done to originally keep costs in check so as to not repeat the failures of the North American Soccer League (NASL).  The strict salary cap rules were relaxed to allow players like David Beckham come to play in the league, with each team given the same number of exceptions in regards to players who do not count under the salary cap.  This has allowed players such as David Beckham, Theirry Henry, Robbie Keane, and many others to come play in the MLS near the end of their career.

I don’t think there is any doubt that David Beckham has had a significant impact on the MLS, but the question is whether Beckham was worth the large salary he was paid by the league.  This exact question was the focus of a research paper in the International Journal of Sport Finance by Robert A. Lawson, Kathleen Sheehan, and E. Frank Stephenson in 2008, entitled “Vend it Like Beckham: Beckham’s Effect on MLS Ticket Sales” (volume 3, p. 189-195).  In this paper, the authors conclude that Beckham increased attendance at stadiums by around 55%, and that he was probably worth the investment.  While it seems likely that MLS recouped the salary they paid Beckham, I wonder if the MLS has really just boosted the popularity of soccer in America, and not necessarily the league.

I point again to Sunday, a day when Liverpool played Chelsea and the MLS Cup final was held.  Not only were fans able to watch Liverpool vs Chelsea live early in the morning, but they could also watch the replay on Fox in the earlier afternoon, at the same time as the NFL was playing its early games.  The day was filled with sports, finishing with the MLS Cup occurring the same time as Sunday Night Football.  The numbers show that the MLS didn’t do very well in terms of ratings, even with David Beckham and other big names playing in the game.  USA Today noted that the Liverpool vs Chelsea replay had double the viewers as the MLS Cup Final.

Fox’s taped Chelsea-Liverpool soccer game Sunday afternoon drew an overnight TV rating that nearly doubled the rating for ESPN’s primetime MLS Cup Sunday.

Fox’s soccer got a 1.5 overnight, which translates to 1.5% of households in the 56 urban TV markets measured for overnights. ESPN’s Los Angeles-Houston MLS title game, which included stars David Beckham and Landon Donovan, drew just 0.8% of households.

This is not a good sign for the MLS, though their timing and placement of the finals was probably not the best.  Scheduling during the same time as a prime-time game between the Giants and Eagles.


Fox wins rights to broadcast the 2018 and 2022 FIFA World Cup

October 22, 2011

As I flipped between ESPN and FX (a Fox channel) tonight, I saw them broadcasting news that Fox had won the bid for the broadcast rights for the 2018 and 2022 FIFA World Cup in the United States.  The big news was made more so by the large numbers in relation to the bid.  Fox, Telemundo (an NBC held Spanish language channel) and Spanish language radio paid a combined $1.2 billion for the rights to the two tournaments.  Fox by themselves are going to pay around $425 million.  To put that into perspective the current right holders of ESPN and Univision paid a combined $425 million for the U.S. rights for the 2010 and 2014 World Cup.  They are saying that FIFA has really cashed in with this new mega bid, with the new rights holders (as of 2015) paying close to double the price than their previous competitors.  While the World Cup has become more popular in the U.S. in recent years, I am not sure that this deal is really worth it for Fox.

As I write this, I am having a bar scroll on the bottom of my TV saying that DirectTV (my television provider in the U.S.) is about to drop FX, Fox Sports, Fox Soccer Channel, and Fox Soccer Plus.  These would be all of the main channels through which the games would be broadcast in the U.S.  Naturally, I am not pleased, as Fox Soccer Channel is one of my main gateways to European soccer while living in the U.S.  While there is a lot of time till Fox wins the deals, I think the availability of the ESPN channels is much better, and makes me worry about whether I’ll be able to watch the games I want in the United States, once Fox takes over the rights.


Liverpools threat of breaking away from the Premier League Broadcasting deal.

October 12, 2011

A few days ago I talked about the landmark case in regards to Premier League broadcasts in Europe, and how there may be important changes coming in regards to how the rights are sold across Europe.

Now the threat is not from decoder cards and external forces, but internal ones.  Liverpool has started to make threats about breaking away from the Premier League’s current overseas broadcasting deal.  Liverpool’s challenge is that the TV rights for Premier League clubs should be sold overseas on a club-by-club basis.  In other words, Liverpool believes they and other clubs should have the right to sell their own broadcasts overseas.  Liverpool’s managing director even came out publicly and stated that this is:

“a debate that has to happen”

The Guardian notes that the current Premier League deal is set up as follows:

Since the Premier League’s foundation in 1992 its success has been largely based on the principle of collective selling, where each club no matter how lowly can expect a fixed share of TV deals with “merit” awards for finishing positions as an add‑on. Changing this model would risk revolt from the smaller clubs who stand to lose most, and thus threatens the league’s very structure.

Liverpool thinks that the super powers of the Premier League, Manchester United, Chelsea, Liverpool, Arsenal (the clubs who are usually at the top of the table) should be getting a bigger share, as they are the ones who are bringing in the large audiences.  Again, these are deals which are worth billions of dollars to the Premier League, but if the money was not split evenly, and were sold on an individual club basis, it would mean an even greater imbalance in club revenues.  And of course, club revenues are a big part of buying talent, and hence being able to perform on the field.  Such a deal would be problematic in my mind, as it would destroy any sense of competitive balance in a league that already has balance issues, especially at the top.  Furthermore, it could mean that the mid-level and low-level clubs would be even poorer, and would not be able to field as attractive a product.

I point to La Liga, where two teams (Barcelona and Real Madrid) dominate the league in regards to revenue, and pretty much dominate on the field as well.  I think the Premier League, for the sake of having a better product, should continue to share revenue, and have the TV rights package deal sold in a single group.


Did ESPN and the ACC collude to steal teams from the Big East?

October 11, 2011

The conference realignment drama continues.  A few weeks ago, Syracuse and Pittsburgh both left the Big East Conference to join the Atlantic Coast Conference (ACC).  Some had believed that ESPN had some hand in this, as the Big East had turned down a billion dollar television contract from ESPN in May.  Thought is that ESPN was mad, and decided to tell the ACC to go after the Big East, of course this was just a rumor.  Then Boston College AD Gene DeFilippo opened his mouth:

“We always keep our television partners close to us,” he said. “You don’t get extra money for basketball. It’s 85 percent football money. TV – ESPN – is the one who told us what to do.”

Wait one second, ESPN told you (the ACC) what to do?  I understand the power of media and media contracts in college sport, but is ESPN really pulling the strings?  Are they colluding with the ACC to try and kill the Big East, one of their competitors for viewership and television dollars on the East coast?

An ACC spokesperson was quick to comment this was not truly the case.

“We’ve got a great partnership and a great working relationship with ESPN,” an A.C.C. spokesperson said. “But they have never and will never dictate to us, especially in regards to expansion.”

So we have an AD who says ESPN told them what to do, and they listened.  Then you have a conference spokesperson who says the opposite.  I think something fishy is going on.  The question is, can they do anything about it?  Is this a potential antitrust violation?  I really do not know, and I’d like to hear what others have to say.  The Boston Globe has reported that Boston College made a big play in blocking local rival UCONN from joining the ACC as well.  Again DeFilippo:

“We didn’t want them in,” Boston College’s athletic director, Gene DeFilippo, told The Globe. “It was a matter of turf. We wanted to be the New England team.”

There is going to be some bad blood when the dust settles, and all is said and done in the conference realignment.  Interestingly, The New York Times is hinting that the University of Missouri is the big piece of the puzzle.  If they move, it could cause a landslide in many different directions.

 


How a landlady may have changed the face of Broadcasting sport in Europe

October 7, 2011

This is a story of a landlady for a Portsmouth pub in the UK, who bought a satellite television decoder from another European country to show Premier League games.  Karen Murphy, the landlady for the Red, White and Blue pub in Portsmouth bought a Greek decoder card to show Premier League games, the key point in all of this is the decoder card is cheaper than paying to show the games on BSkyB, as most establishments do in the UK.  This case made it all the way to the European Court of Justice (ECJ), where a ruling was made yesterday against Ms. Murphy who will be allowed to continue broadcasting games using the decoder.  The ECJ states that prohibiting:

“import, sale or use of foreign decoder cards is contrary to the freedom to provide services and cannot be justified either in light of the objective of protecting intellectual property rights or by the objective of encouraging the public to attend football stadiums”

However, the ECJ said that this area does fall under copyright protection in the UK which means that while Ms. Murphy lost because the card is used for broadcast to the public, it does open the door for private use of the cards.  The Guardian article notes:

However, the ECJ said live match coverage itself was not covered by copyright protection, although the Premier League could claim ownership of FAPL-branded opening video sequences, theme music, on-screen graphics and highlights of previous matches.

This means that as long as the FAPL and BSkyB ensure that match coverage includes enough copyright elements pubs will not be allowed to show foreign broadcasts.

The big implications of this case, is for individuals.  The ruling basically counter acts the territorial region-by-region rights which the Premier League sells.  It is now possible for fans to go out and get the cards and get Premier League for cheaper.  This means that fans could potentially try and get around paying the high BSkyB fees, which BSkyB can’t be a fan of as they paid over one billion pounds for the broadcast rights in the U.K.  The big implication is that the Premier League may be forced to change the method in which they sell broadcast rights from regional, to a single Pan-European package.

The Premier League had this to say:

“The areas of law involved are complicated and necessarily we will take our time to digest and understand the full meaning of the judgment and how it might influence the future sale of Premier League audio-visual rights in the European Economic Area.”

The Premier League will have to wait for some further court rulings in the UK high courts in regards to this case, but they are probably worried.  They are said to make a billion pounds for their non-UK television rights this year, and are receiving around 1.6 billion pounds for UK rights from BSkyB.  How they will potentially switch their sales of broadcast rights is an important question, with big financial implications for the league as well as fans and consumers alike.  As a side note, the Guardian had a poll, and almost 75% of people said they would now try to buy the foreign decoder cards to watch Premier League matches.