The SPL’s Amazing New Broadcast Deal?
By Nick Smith:
The SPL recently signed a new broadcast deal with Sky Sports, worth approximately £13million per season. So, was this television deal good, or bad for our game?
What is undeniable is that this deal provides clubs (and therefore their bank managers) with some long term security, but the bigger question is could – or should – they have gotten more? Yes, they could make considerably more from their television rights. Firstly, Sky Sports have approximately 1million subscribers in Scotland, paying £21 per month for coverage. This translates into roughly £252million per year (Gross); yet only £13million reaches our game. So why are our rights so massively undersold?
The simple answer: Hampden’s PR nightmares. During the Rangers crisis, several senior executives in our game claimed that without Rangers, our game is worthless. There would be no attraction and no TV deal. Talking your own product down so badly never does it any favours, but worst of all, Sky (having done their homework) knew there was still a lucrative market in Scotland that would leave if they cancelled their SPL coverage. Letting your only possibly supplier know you are on the ropes and desperate gives your supplier a huge advantage, and puts you in a much weaker position.
Looking more deeply, we have to ask why we were in such a position. The SPL, for reasons unknown to the rest of us, agreed a deal that guaranteed Old Firm games. How they could agree such a deal – especially when Rangers’ financial problems were well documented at the time – is bizarre. Effectively the SPL left itself in a position where they had to rig the league to ensure that neither Celtic nor Rangers were ever relegated, or be found in breach of contract. This led to the farce we saw over the summer when a series of votes were held by clubs to decide whether Rangers should play in the SPL, SFL1 or SFL3 – another sign of weakness and another indication to Sky executives that they could steal an absolute bargain.
The SPL recently signed a new broadcast deal with Sky Sports, worth approximately £13million per season. So, was this television deal good, or bad for our game?
What is undeniable is that this deal provides clubs (and therefore their bank managers) with some long term security, but the bigger question is could – or should – they have gotten more? Yes, they could make considerably more from their television rights. Firstly, Sky Sports have approximately 1million subscribers in Scotland, paying £21 per month for coverage. This translates into roughly £252million per year (Gross); yet only £13million reaches our game. So why are our rights so massively undersold?
The simple answer: Hampden’s PR nightmares. During the Rangers crisis, several senior executives in our game claimed that without Rangers, our game is worthless. There would be no attraction and no TV deal. Talking your own product down so badly never does it any favours, but worst of all, Sky (having done their homework) knew there was still a lucrative market in Scotland that would leave if they cancelled their SPL coverage. Letting your only possibly supplier know you are on the ropes and desperate gives your supplier a huge advantage, and puts you in a much weaker position.
Looking more deeply, we have to ask why we were in such a position. The SPL, for reasons unknown to the rest of us, agreed a deal that guaranteed Old Firm games. How they could agree such a deal – especially when Rangers’ financial problems were well documented at the time – is bizarre. Effectively the SPL left itself in a position where they had to rig the league to ensure that neither Celtic nor Rangers were ever relegated, or be found in breach of contract. This led to the farce we saw over the summer when a series of votes were held by clubs to decide whether Rangers should play in the SPL, SFL1 or SFL3 – another sign of weakness and another indication to Sky executives that they could steal an absolute bargain.
Aberdeen and Ross County battle it up. Photo by Inverness Reds
Be under no illusions, research has shown that almost 70% of Scottish Sky Sports subscribers would cancel their subscription if Scottish Football left. Sky will have known this, and the SPL should have done their homework. If they had, they would have stood firm and refused to accept a smaller deal.
The next question we need to answer is how much the Scottish game could actually make from running its own channel. Several years ago the SPL considered operating their own television channel, however decided against it. We undertook some research over the summer to analyse what the SPL could make. Exact figures are difficult to nail down, however we researched the costs of operating a television channel, and the logistics of it all. Based on those findings, it is clear that the SPL could easily operate its own television channel, and generate far greater revenues than they currently make from selling their rights.
Unfortunately, we will now have to wait five years before these findings become relevant.
Nick Smith is the Managing Director of RCS Promotions Ltd, a Scottish marketing agency who conducted extensive research into the broadcast potential of both the SPL and the SFL. Follow Nick on Twitter - @Nick89Smith and RCS Promotions on @RCSPromotions
Comments
Why are we asking people to watch the games in their home instead of going to see their team?? This is what is killing Scottish football. We can watch Celtic live at midday and man u at 16.00hrs. This is totally wrong. Fans should go to the game and give their money to their club, not give it to sky to take a massive cut then pass on some to Spl who takes a profit before filtering it down to the clubs, who, incidentally have 1/3rd empty stadiums!!!
Surely we should have no live tv football when our leagues are in action and tha includes English games. It's a great league but they shouldn't be keeping our fans in the armchair.
No live tv (except cup finals an big internationals) and through time the crowds will increase and the cubs can then have their income direct from the fans.
Im cancelling my sky sports, not that it stopped me going to all my clubs games. It's my way of protest of Tv killing our game.
L
Sky announced the deal to screen matches first and the media concurrently announced that the value of the deal was £13m per season. The Sky PR did not include any financials, so it's unclear as to where this number came from - cannot find a PR relating to this news on the SPL website.
ESPN at that point had no new agreement with the SPL. They subsequently agreed a deal to show an increased amount of games, including 10 from the SFL, but no increased amount for these matches has ever been announced.
Are ESPN paying an additional amount to the leagues for these games that has not been published?
OR
Was the £13m the agreed figure between both broadcasters and it was non-revenue related items that held up ESPN's agreement? If so, what is the split between the two, supposedly rival broadcasters?
OR most worryingly
Do Sky have rights to all SPL/SFL football and are they charging ESPN for a share of it, thus increasing their own profits to the detriment of Scottish football?
I'd hoped that after the events of the last 12 months, the MSM would dig a bit deeper into these type of announcements but all we saw was the usual rush to get the PR out first, as opposed to any sort of analysis on the deal itself, which although it brings welcome stability during a difficult period for the game remains a very poor one in comparison to other leagues of similar standing.
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