[Article] The Sky-high stakes which sparked a pub brawl

DMC

Interesting article this, as it shows that pubs are fighting back, and winning. Also, that the foreign rights for next season have not yet been decided.

The Sky-high stakes which sparked a pub brawl
http://media.guardian.co.uk/broadcast/comment/0,,1861011,00.html
David Conn
Wednesday August 30, 2006
The Guardian

As just causes go, it perhaps falls a little short in the battle for hearts and minds, but the Premier League none the less is determined to plough on with its righteous fight against England's bolshie boozers. Although it has suffered a handful of defeats in court, the Premiership maintains it will slap criminal prosecutions on any landlords who beam coverage of matches from overseas broadcasters into pubs rather than pay the eyewatering subscription rates charged by Sky.

Landlords of locals in Portsmouth, Rochdale and West Bromwich have successfully defended prosecutions in recent months, arguing that they were not acting dishonestly when they bought boxes and smart cards to enable them to show live Premiership games from Greek or Arabic TV stations.

Paul Dixon, a solicitor from the firm Molesworths Bright Clegg, who represented four of those acquitted and has nine further cases pending, accuses the Premier League of heavyhandedness. "It is arguable that the landlords are not even breaching civil laws or contracts by paying for a broadcast from overseas, but by mounting criminal prosecutions the Premier League is bullying publicans simply to protect Sky's monopoly over football," he said.

The Premier League is sensitive to that charge but argues that it is duty-bound to defend the exclusive TV rights for which Sky pays so handsomely. "That money goes into football, including the grass roots," a spokesman said. "Landlords who show matches without paying Sky are breaching copyright law and we will prosecute. In the next month we will be targeting raids against the suppliers of the equipment."

There is a great deal more to this than the sight of the Premier League pursuing landlords of the Dog and Partridge in Rochdale, or the Royal Exchange in Portsmouth, with all its commercial might. This is about protecting a monopoly, one which has been tremendously lucrative not just for the Premier League's 20 clubs but for BSkyB itself since it first paid £304m for the exclusive rights when the old First Division clubs broke away from the Football League to form the Premier League in 1992.

Few would have predicted then that News Corporation, Rupert Murdoch's company, which owns just under 40% of BSkyB, would command the power and fortune it has attained today. NewsCorp launched Sky on February 5 1989 with the slogan "a new world of freedom" but people were free not to buy a dish. Sky offered news and films but no football, and the sporting highlight of the first week, Baltic Cup handball, did not send crowds racing to Rumbelows to sign up.

Within a year BSkyB was losing £10m a week and carrying huge debts which were threatening not only to bury the fledgling channel but pull News Corporation down with it. In February 1991 Murdoch's company came within minutes of being put into receivership, before 146 banks finally agreed a tough £4.2bn refinancing package.

Alan Sugar's company, Amstrad, which was making the dishes for Sky, also racked up huge losses, £70m in 1992. A year earlier Sugar had taken over Tottenham Hotspur, and so he had a crucial vote inside the Premier League, which sent that first TV deal Sky's - and Amstrad's - way. By then, BSkyB had become convinced that in England, in the words of David Hill, its former head of sport, football was "first, second and third" in its appeal to telly watchers.

As history is now told, football was still in post-Hillsborough gloom before Sky and the Premiership redeemed it, but in truth it was in recovery, and the game's army of loyal fans was the golden egg for BSkyB. Suddenly bereft of any live action previously available on ITV or BBC, fans trudged along to buy the dishes. BSkyB immediately, in 1993, turned its losses into a £62m profit.

The company, along with News Corporation, has built its fortunes on buying Premier League football exclusively. It paid £670m in 1997, £1.2bn in 2001, £1.024bn in 2004 and now, for the 2007-10 rights, £1.2bn. The total is about £4.4bn, in the Premiership's overall TV earnings since 1992 of about £6.3bn.

BSkyB has not shipped such money out for the love of football's grass roots. News Corporation has become one of the world's most powerful media empires substantially on the payments of English people who have nowhere else to go to watch live league football. BSkyB's most recently published figures boast 8.2m subscribers, a third of British homes, paying an average £388 each a year, making Sky's total earnings from domestic subscribers £3.2bn. Industry research has found most football fans would drop their Sky subscriptions if it lost the rights to Premier League matches.

Prosecutions of modest provincial pubs might look a touch rabid, but as watching football in the pub has become a central feature of our sporting culture, it has become a huge business for BSkyB. Its charges have steepled, ranging up to £2,210 per month, £26,520 a year, for a town-centre pub subscription.

With 47,000 commercial subscribers, mostly pubs and clubs, it is believed that BSkyB recoups its whole outlay for the Premiership TV rights solely from this market. No wonder landlords are keen to explore beaming Al-Jazeera in for a fraction of the price, or that the Premier League is fiercely enforcing the crackdown.

Altogether, BSkyB's pay-TV business turned over £4.1bn last year, making £877m profit, paying a succulent dividend to shareholders, including £82m to News Corporation - built solidly on the loyalty of fans paying £432 a year for Sky Sports packages, or more to include the pay-per-view service, Premiership Plus.

It is remarkable that the Office of Fair Trading here and the European Commission, twice, have bludgeoned away at the Premier League's monopolistic TV arrangements yet failed to ensure that a single live match is available on terrestrial TV.

Now the Premier League is flush again, with the £1.2bn from BSkyB for 2007-10, plus £400m from Setanta, the Irish broadcaster, for a package equivalent to the current pay-per-view, about £150m from the BBC for the highlights, and deals for the "near live" and other rights bringing the total so far to £2.2bn, with the overseas rights yet to be auctioned.

The players will fill their boots, as they have every time the TV pot has grown - where once £10,000 a week astonished fans, the next wages round will surely surpass the £130,000-a-week benchmark for the top players.

Their agents will be rubbing their hands in anticipation, club directors will expect nice round bonuses, and some bigger shareholders will no doubt hope to sell their clubs to passing foreign billionaires. Richard Scudamore, the Premier League chief executive whose £800,000 salary package was swelled last year with a £200,000 bonus for bringing in the current TV deals, will no doubt be abundantly thanked again by his club chairmen.

BSkyB, too, will be readying itself for more huge profits, from a formula whose whole value lies in having the rights exclusively. This is a party altogether too splendid for a pub landlord, carrying a crafty Al-Jazeera smart card, to be allowed to poop.

Aquos76

Indeed as you have said, the pubs are winning ok. As recently as this week the Premier league has dropped another case

30/08/2006 09:47

The FA Premier League (FAPL) has dropped its case against another Portsmouth licensee for showing foreign satellite football.

Linda Smith's solicitor Paul Dixon said she is his 10th licensee client to have charges against her withdrawn by the FAPL for showing games using foreign systems last season.

Smith used Arabic channel ART to screen the Tottenham versus Wigan match on Sunday 19 February at her pub, the Old House at Home.

To convict a licensee under the Copyright, Designs & Patents Act 1988, it must be proved that a licensee 'dishonestly receives a programme...with intent to avoid payment'.

Earlier this month the FAPL revealed to the MA that it would abandon a number of old prosecutions because of difficulties proving licensees knew the systems were illegal.

Instead, it promised a big publicity campaign and said it would write to pubcos, brewers and individual licensees before starting prosecutions again this season.

Smith was not part of the 'Pompey five' group of Portsmouth licensees who had charges against them dropped for showing games using foreign systems, after amassing a £15,000 legal fund to fight convictions.

Earlier this month the FAPL contacted the Morning Advertiser to explain why some of the cases where being dropped whilst other cases were still being persued.

Link

Also here is a piece which was shown on Channel4 news back in may

http://www.channel4.com/news/special-reports/special-reports-storypage.jsp?id=2301

watty

Sky & Premiership have got greedy and won't find EU support, that's for sure.

Pal

I was in the north of England on Saturday.

Watford v Manu was showing 3pm live on ART in loads of pubs.

The FA have a logic that if they allow live 3pm tv football, clubs will lose out on attendances. It's all nonsense of course.

3pm tv football is a reality now and I would expect Sky to step up to the plate soon with an all new singing and dancing high def load of bollocks screw u all package.

In the meantime, the punter watches ART.

DMC

I wonder will the Premier League sell to ART this time around? Maybe they will strengthen their demands of their foreign rights holders, on foot from Sky as they are in cahoots?

Pal, I'd say the fear is not at the gates of the Premiership teams, but of lower divisions and non-league football.

UEFA (and the EC) allows for leagues to blackout fixtures from TV in their home country at the main kick-off time of the weekend. Thats why we get the 3pm fixture on RTÉ/Setanta over here. That is a brush they can use against them, I wonder has it been tried in court?

watty

So because 15,000 might stay at home 56Million aren't allowed to watch?
Interesting logic, when the TV rights money has all ready turned the game from Sport to a Hollywood show and multiplied saleries x20 (and thus costs).

Pal

DMC wrote:

Pal, I'd say the fear is not at the gates of the Premiership teams, but of lower divisions and non-league football.

Sky and the FA will just pay them off in exchange for the lower clubs going away quietly.
More TV means more money.
Everybody's a winner.
ART gets it in the neck.
It's pretty simple.

The Italians figured all this out ages ago. Juventus hardly have anybody at the match now and they just keep getting richer. Then they got really greedy and started fixing the matches.

Go figure.

Aquos76

DMC wrote:

I wonder will the Premier League sell to ART this time around?

And the end of the day, money talks and Art paid massive money for their last contract and they will do the same this time around.

Snake Plisken

Art might stop using hotbird and only use Nilesat which is pretty hard to receive in northern Europe, there have always been rumours of them moving in the last few years, lets hope it doesn't happen.

Snake

watty

25.5 is easy to get. BADR? It is for Arab regions, all Arab sats. Two LNBs side by side on 80cm dish will do Sky and BADR