As the football world currently focuses on the international stage, the English Premier League has made a call of continuing its blanket broadcasting strategy until the end of October at the least, with a number of matches available on pay-per-view.
The ‘blitz spirit’-esque response to the initial wave of Covid-19 that came in the form of Project Restart was an admirably collaborative one in which any kind of competitive rivalry between broadcasters was set aside in favour of wrapping up the 2019/20 season and ensuring fans could see their teams play. Even the BBC was handed four free-to-air Premier League matches for the first time in its history.
That was carried through to the start of the 2020/21 season, where all 28 matches in September and the beginning of October were made available to broadcasters following an initial offer of 20 extra matches across the entire season.
In many ways, the initial decision to show all matches through to the end of the season was a logical one from a business standpoint: get through this difficult period and look to pick up the pieces in the summer when the picture is clearer and the light at the end of the tunnel starts to shine brighter.
That light however is much more dim than it was previously, with a feared second wave of the pandemic starting to manifest in the UK and hopes of getting fans back into stadiums in the near future being squashed.
The government had initially pencilled in October as the start of a period in which fans would be allowed to return to matches in limited capacity, but now it looks impossible for Premier League clubs to make any match day revenue for the remainder of the calendar year.
The EPL has announced that it has extended the blanket coverage of matches through to the end of October with a number of matches available on PPV, but this again has the feeling of a temporary bandage for a wound which will require more serious addressing in the coming months in order to preserve the business viability of the world’s most-watched and most-profitable football league.
Despite there being little to play for competitively for most clubs following the restart – Liverpool had all but won the league by Boxing Day and both relegation and Champions League-place battles were down to a small number of clubs – audiences still were watching coverage of the EPL in their droves.
Part of this was undoubtedly down to fans being starved of football for months on end. Even South Korea’s K-League – ranked only 54th in the world by FIFA’s global league coefficient – managed to score international broadcasting deals and attracted tens of thousands of viewers from across the world.
When the Premier League finally returned in June, fans were all too happy to watch scoreless draws between mid-table teams with nothing to play for.
Six months later however the narrative is slightly different. For the first time since the restart, reports emerged that viewership was dipping and the fear of audience fatigue was starting to set in.
Audiences are still tuning in for the big matches – last weekend’s double header of Manchester United v Tottenham Hotspur and Aston Villa v Liverpool contributed to the biggest day in Sky Sports’ history – but the matches lacking in intrigue that would typically not be show domestically clearly aren’t the draw that they were several months ago.
Tim Westcott, senior research manager at Omdia, says that solely attributing this dip to fatigue is an oversimplification. “The decline in viewing – or rather the lack of growth – is quite a long-term trend going back over a few years,” the analyst points out.
“First, there are only really big audiences for a handful of clubs – the Manchesters, Spurs, Arsenal, Chelsea and Liverpool – and the peak audiences of two million or so on Sky are not too different from where they were, say, five years ago. I don’t think it’s the blanket coverage.”
Whether it is a natural trend, audience fatigue, or a combination of both, decreasing audiences lend credence to the business viability of shifting these matches from typical broadcast and onto pay-per-view – perhaps the most controversial part of the EPL’s October announcement.
The new set up will see five fixtures per matchday not selected for broadcast available for £14.95. The matches are not, as previously reported, being housed on the clubs’ websites, but rather on BT Sport Box Office or Sky Sports Box Office for £14.95, and it does not include season ticket holders.
The model has some clear benefits, particularly in terms of match day revenues with clubs facing a loss of £100 million for every month that fans are missing from stadiums.
For audiences, Westcott says that “it would potentially reach new customers” but “risks consumers reacting against forking out yet more money and the risk of bad publicity in case of technical issues.”
The backlash against the decision has already begun, with Alex Hurst, the chair of Newcastle United’s Supporters Trust saying: “The idea that Premier League clubs need to implement PPV because of economic needs would carry more weight if they hadn’t just spent £1 billion on players, furloughed staff, received government loans, weren’t charging fans for games they aren’t going to and hadn’t just made thousands of staff redundant.”
Ben Rumbsby, an investigative sports journalist at the Daily Telegraph tweeted a clarification to the statement that “Sky and BT won’t make a penny on this and that all profits will go to clubs to make up for some of the loss of match-day revenue.”
The domestic broadcast rights to the English Premier League are some of the most valuable in the world. The most recent round of sales saw the EPL make £3.1 billion per year in TV revenue, with £1.7 billion of that total coming from domestic broadcasters Sky Sports, BT Sport and Amazon.
By definition, the increased number of matches given to each of these broadcasters devalues each deal. That is to say, the estimated £80 million per season that Amazon pays for 20 matches translates to a cost of £4 million per match, for example. Giving it additional matches at no extra cost means that it is getting more ‘bang for its buck’, which effectively makes each match worth less in the process from a financial perspective.
For the league, the more matches it gives out for free to broadcasters represents a loss in revenue right now, but also potentially will get broadcasters – and their paying subscribers – acclimated to paying less for more in the long term.
This, combined with the financial downturn caused by the pandemic, has left some analysts, such as Enders Analysis, to predict that the next domestic rights tender could generate revenues of 5-10% less than the 2018 total with an acknowledgement that Sky and BT both overpaid previously.
Westcott is slightly more cautious in his expectations, calling such bold statements “not much more than informed guesswork.”
The analyst however does predict that there are a number of factors which will prevent any inflation such as no new bidders on the horizon and the ongoing cooperation between Sky and BT.
He also notes that the “sports subscription market has hit a peak, so buyers are not going to be able to cover the cost of rights hikes by signing up thousands of new customers.”
Westcott does not think that the blanket coverage will have had an effect right now, but the fact does remain that it is in the league’s interest to make each match worth as much as possible and all matches being available does the opposite of that.
If this PPV model proves to be a failure and the league decides that reverting to the universal blanket coverage for the remainder of the season would devalue the rights too much, fans may be faced with an unattractive situation that we got a glimpse of this week in the women’s game.
Fans, players and pundits alike all shared varying levels of vitriol over a staunch refusal to broadcast the Continental Cup tie between Chelsea and Arsenal – a derby match between the two most dominant English women’s teams over the past decade – anywhere in the world.
Not even audio commentary was allowed on either club’s website, and the groundbreaking FA Player was not permitted to show the match. The only option for fans of either side was to be following social media, and to wait for the video highlights package to be released the following day.
The negative response from that was already audible, with Arsenal manager Joe Montemurro saying “it should be as standard that these games are shown on television,” and Chelsea boss Emma Hayes calling the lack of availability “extremely frustrating.”
For all the frustration over this tie, there would be significantly more outrage if the same thing were to happen in the much more mainstream men’s game with some matches unavailable for anyone to see.
Westcott however is confident that the men’s game will not fall into this trap, and that the league “will continue to license additional matches in the UK as long as there are no crowds in the stadiums.” He adds that ongoing evaluations of the product may lead to longer term abandonment of the 3pm blackout and experiments with exclusively streaming games.
The immediate future is clear – for the next month at least – but questions will continue to be asked about the League’s strategy if it continues to work month-to-month in this pandemic.
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