Is the £900m Champions League TV Deal Bad News for Fans?

Nick MillerFeatured ColumnistNovember 14, 2013

NYON, SWITZERLAND - JULY 19:  A UEFA Champions League draw ball is being prepared backstage prior to the UEFA Champions League Q3 qualifying round draw rehearsal on July 19, 2013 in Nyon, Switzerland.  (Photo by Harold Cunningham/Getty Images)
Harold Cunningham/Getty Images

The announcement that BT had acquired the rights for the Champions League, paying a massive £900 million to show Europe's top club competition, was hailed as a seismic shift, a signal that Sky, the behemoth that has dominated football broadcasting in England for over 20 years, finally has a serious competitor.

Sky has of course fought off previous challengers in the manner of the biggest kid in school holding the head of a younger, smaller adversary at arms length as he swings his fists impotently. ITV Digital, Setanta and ESPN have all tried, but all failed to seriously compete.

Now BT has arrived, and it is the only broadcasting company that has a serious chance, simply because it can financially out-muscle Sky. Nobody else has been able to do that, but with 2012-13 revenues of £18.3billion against Sky's £7.2billion, the established power can no longer blow opponents out of the water with the sheer weight of money.

It will be interesting to see how Sky responds to such a significant challenge and another force in the market, especially since the last group of Premier League rights were sold at a 70 percent markup to the previous deal, and those bids were made even before anyone had a real idea of how serious BT was about covering sport.

However, a question that is often raised in these discussions is whether or not this competition is actually good for the consumer.

In most industries, it in theory forces prices down and motivates companies to provide a better service, but in terms of football on TV, it usually does the opposite, in terms of price in any case. It was decreed by the European Commission in 2006 that no one broadcaster could hold the rights for all games, something no doubt welcomed by the Premier League because it created competition and thus more money for them. After all, if Sky had nobody serious to bid against, where's the motivation to pay more?

But does this benefit fans? Are we simply being asked to take out two subscriptions rather than one? Where competition is beneficial for the public in some scenarios, it perhaps is not in football. It's good fun comparing the ways in which two TV stations cover the game, but it's much easier to know that all games are going to be in the same place.

LONDON, ENGLAND - OCTOBER 23:   Premier League Chief Executive Richard Scudamore addresses the media during the Premier League and the FA Facilities Fund Launch at The London Nautical School on October 23, 2013 in London, England.  (Photo by Jan Kruger/Ge
Jan Kruger/Getty Images

When the Premier League rights are next up for auction in a couple of years, one wonders how wary they will be about dividing the games up too much. If, say, BT and Sky split coverage 50:50, that means half of the games that were previously available to subscribers will be gone, and how many of those viewers will pay the extra for another TV channel? It's becoming easier and easier to watch games on illegal Internet streams, and if fans are being forced to pay more and more, this will only increase.

Premier League chief executive Scudamore told Management Today earlier this year:

We've not been able to communicate our success particularly well. Some of the criticisms levelled at us are wide of what we do. We hear too many commentators say the football is fantastic but we're not so good as a business. We've not been able to communicate that link better.

By making life more complicated for those he would no doubt describe as "customers," Scudamore clearly has some more work to do on that communication.