THREE INDUSTRY EXPERTS believe that the multi-billion euro war for TV sports rights is showing no signs of slowing down.
The global sports rights market is currently worth a reported €20 billion each year, with the latest explosion in the UK and Ireland fuelled by the arrival of BT Sport and its battle to eat into Sky Sports’ dominance.
The emergence of another big player has forced Irish consumers to choose: pay extra for an additional premium subscription or run the risk of missing out.
“The major sports rights drive business for almost every television company in the world,” Amory Schwartz explained at the Web Summit in Dublin today.
Schwartz is the founder and CEO of Sports Authority, and previously was the founder and CEO of NASN (the North American Sports Network) which was acquired by ESPN in 2007 for a reported $120m.
“If you’re going to get customers, the first thing you do, and it may be a lazy strategy, is to buy the most valuable sports you can get,” he said.
Benjamin Levy, President and COO of TheScore, agreed: ”One of the most fundamental reasons why sports rights have continued to escalate is because fundamentally, sports rights are the only thing left on television that are truly live and truly drives tune-in at the time the game is live.
“In terms of whether there’s a bubble or not, it’s tough to say, but I can’t see anything from where we sit today that would cause rights to hold or de-escalate.”
It is impossible to tell a bubble until it bursts, added Colm O’Neill, CEO of BT Ireland, but he believes that fundamentals of the sports market are sound at present.
It seems that the current rights escalations and the ability for networks to continue to pay huge sums of money for sport and then monetise that, it seems to be reasonably secure at the moment.
“But as I say, you never know you’re in the middle of a bubble until it bursts.”
O’Neill explained why BT places such a premium on live sport as part of its overall strategy.
“BT at its heart is a telephone and networking company. What we identified was that our customers were buying their telephone and broadband connection in a package, and they were buying it with a TV package, and the thing that influenced most what TV package they selected was sport.
What we’ve done is we bought a set of rights, created a sports channel from scratch to compete in the marketplace in the UK in particular, and we’ve brought it with Setanta to the Republic of Ireland, and we’ve tried to build a model that brings sport back to people.
“I’ve grown up right through my life and when I was young, we had sport for free on a Saturday, and now you have to pay for premium sport.
“This is a way, albeit as part of a subscription for other products that you would be buying anyway, we give BT Sport away to our UK customers for free.
“It’s a way of trying to bring sport back to the people.”
