Premiership TV rights see 70% cost increase
In the news is the fact that BT and Sky have paid 70% more for the next chunk of Premiership TV rights than they did the last time around. In one sense this doesn’t affect me whatever. Although being a sportsman I do take a passing interest in all sorts of sports, the Premier League strikes me as a vehicle that attracts bad sportsmanship and a poor example to kids. Such is the money at stake.
We have a very competitive broadband market in the UK. ISP’s have been trying to layer services to squeeze more cash out of us and TV certainly brings more margin. BT recognises this which is why it’s dipped its toe in the TV market and why it has been going head to head against Sky for sporting rights.
For Sky this is almost a life or death matter. Sports have been Sky’s Unique Selling Point for donkeys years. Without this USP their offering is significantly diluted.
So in a market where it’s been a race to the bottom for some years now this sizeable increase in the cost of providing TV sports services is likely to squeeze margins further or result in price increases that wont go down well with punters. Over at broadbandrating.com we saw high levels of complaints when ISPs had to increase their analogue line rental costs, even though these increased were in the region of pence not pounds. Virgin saw even more negativity when their TV pricing shot up again.
Where I’m getting to is that whilst normally a competitive market drives down costs, in this case it’s driving up costs because the key bit of content, football, is sole sourced and has no incentive to roll over and play ball with lower prices (sorry).
There is no indication as yet as to how this might affect end user prices for Sports TV packages but Sky and BT need to show a decent return to shareholders and they can’t always absorb this kind of cost increase. I guess we will find out soon enough, for what it’s worth.
That’s it for now. Ciao amigos.