The win-some, lose-some game of TV sports rights

For fans, it’s frustrating. For media companies, it’s expensive and perilous.

 Pro14 rugby: a good example of a rights-holder that has set up an effective formula in Ireland, where the pay-TV option on Eir Sport is blended with TG4’s free-to-air access. Photograph:  ©INPHO/Ryan Byrne

Pro14 rugby: a good example of a rights-holder that has set up an effective formula in Ireland, where the pay-TV option on Eir Sport is blended with TG4’s free-to-air access. Photograph: ©INPHO/Ryan Byrne

 

When the men’s Rugby World Cup (RWC) whirs into action in Japan next month, it will mark a pivotal moment for Eir Sport.

Will it be a crowning triumph? Although some 14 games – Ireland’s fixtures, the knockout stages and the final – have been sub-licensed to RTÉ, Eir Sport will show all 48 games, having outbid other broadcasters for the primary Irish broadcasting rights back in 2016. To the ire of at least one rival, the Irish team sponsor Vodafone, Eir has advertised itself as “home of rugby in Ireland”.

But three years is a media industry epoch, and since Eir made its splurge, the carousel of TV sports rights has spun at a pace that has left many fans dizzy. Ask RTÉ, Virgin Media Television, the BBC, Channel 4, even the comparatively rich Sky: in this complex business, you win some, you lose some.

“There’s a lot of money at stake,” says Rob Hartnett, founder of Sport for Business. Sport has always attracted wealthy people. It also happens to be “the media’s biggest play”.

RTÉ’s coverage will inevitably dilute Eir’s viewership. But Eir’s exclusive games should still capture interest

Just the story of Eir Sport seems to epitomise several industry trends in one. Then counting US hedge fund Anchorage as its largest shareholder, Eir announced its RWC rights victory and rebranding of newly acquired Setanta Sports to Eir Sport on the same day in July 2016. Its play, an echo of a similar tactic deployed by BT Sport in the UK, was to use exclusive sports rights to flog broadband. From that autumn, the Eir Sport pack offered free to broadband customers included the soccer-endowed BT Sport. It had declared its ambitions.

Since then, regime change at Eir, now controlled by companies connected to French telecoms billionaire Xavier Niel, prompted the exit of the very executives who plotted this strategy. The RWC is not an “orphaned child” at Eir Sport – there are signs that it has invested in the coverage, says Hartnett. “But the jury would be out on whether they would be going with it again.”

So is Eir onto a RWC winner? In the “yes” corner, there’s the fact that in Ireland, rugby occupies a high rung in the sporting hierarchy. In the “no” corner, there’s those early morning fixture times. The sub-licensing deal with RTÉ throws up a “maybe”.

The arrangement was necessitated by the presence of Ireland’s RWC games on the Government’s “major events” list, which draws on an EU directive to specify which sporting events must be shown free-to-air in this market. Eir considered setting up its own free-to-air channel and keeping the entire tournament exclusive to it, before taking the path of least resistance.

England v Croatia

RTÉ’s coverage will inevitably dilute Eir’s viewership. But Eir’s exclusive games should still capture interest. Last year’s list of the most-watched TV was dotted with sports events that didn’t actually involve Ireland – RTÉ2’s coverage of England’s World Cup semi-final against Croatia had the fourth-highest ratings on Irish television in 2018, eclipsing even the audiences for the senior hurling and football All-Ireland finals.

Either way, ratings may be slightly beside the point for Eir, just as they are with Sky’s foray into GAA. The priority is to put sports rights front-and-centre in the marketing campaign for new customers, not to maximise ad revenues from massive audiences. “I imagine an awful lot of the promotion will be around broadband,” says Hartnett of the RWC. “Broadband is a much bigger animal than pay-TV.”

The RTÉ and Eir deal is not the first such sub-licensing arrangement. A similar one applied to the women’s tournament in 2017. RTÉ also sub-licensed some matches in the Euro 2016 tournament to TV3 in a desperate bid to balance its books (though TV3 said it would have happily taken more).

England v Croatia World Cup semi-final: Had the fourth-highest ratings on Irish television in 2018. Photograph: Christian Hartmann/Reuters
England v Croatia World Cup semi-final: Had the fourth-highest ratings on Irish television in 2018. Photograph: Christian Hartmann/Reuters

Sharing coverage is logical if the sheer volume of the action exceeds what broadcasters could possibly fit on their linear channels. RTÉ’s splitting of the FIFA Women’s World Cup with TG4 was one such happy partnership: primary rights holders RTÉ couldn’t broadcast all the matches because of its GAA commitments, so it sat down with TG4’s schedulers and found a way to divvy them up.

But the Euro 2016 and FIFA Women’s World Cup were notably both partnerships between free-to-air broadcasters. When rights are spread between free-to-air and premium or subscription services, fans who fancy watching the whole thing without bankrupting themselves can be frustrated. And this frustration may be here to stay. Sporting bodies are keen to balance the extra cash brought in by aggressive rights-bidders with the mass exposure that a free-to-air broadcaster brings. From their perspective, it can be worth it to play the field.

Blended formula

“Pro14 rugby is a good example of a rights-holder that has set up an effective formula in Ireland, where the pay-TV option on Eir Sport is blended with TG4’s free-to-air access,” says John Trainor, chief executive of sponsorship consultancy Onside.

New TV rights deals can bring “a notable increase” in the broadcasting revenue for participating clubs, he says. “And where sponsorship revenues continue to stay strong in this model, commercially it can all work.”

In the UK, there’s been a great deal of hand-wringing about the damage that some sports – including Formula One, golf and Test cricket – have allegedly done to their place in the national conversation by going premium.

But sponsors and advertisers aren’t exactly pulling out as a result of the shift away from free-to-air, Trainor notes. If anything, there’s an acceptance that they’re buying a “quality not quantity” of eyeballs. “They’re a more fanatic fan.”

Hartnett describes the Premier League as “the big outlier” – the sport that can keep its hold on the public imagination despite only having highlights on free-to-air. He also doesn’t see too much harm having been done to the profile of Champions Cup rugby, which was off free-to-air here for 12 years before Virgin bought the rights to one game each weekend and put them on Virgin Media One.

Equally, there’s been a realisation that excluding free-to-air audiences from key sporting moments just isn’t cricket. In July, Sky did a deal with Channel 4 so it could show England play in and win the Cricket World Cup on home soil. Talks “went right down to the wire”, Hartnett notes. And in what sounds like happy days for the Google-owned video platform, Sky also showed the final on its YouTube channel. BT Sport (in the UK only) also makes a habit of streaming the Champions League final on its YouTube channel.

Japan beat South Africa in the 2016 Rugby World Cup. Photograph: Steve Bardens/World Rugby/World Rugby via Getty Images
Japan beat South Africa in the 2016 Rugby World Cup. Photograph: Steve Bardens/World Rugby/World Rugby via Getty Images

Despite this pragmatism, there are flashpoints for fans. “I think the fan has been left feeling confused by what some broadcasters have tried to put in place,” says Trainor. “There’s been a rush to strategies that haven’t been fully formed.”

This brings us back to the Eir Sport pack. Its appeal will have been gutted, for some, by the recent loss of BT Sport. From this season, BT Sport and Mickey O’Rourke’s Premier Sports are both distributed by Sky. For English Premier League fans, this is significant, as between them BT and Premier Sports have the rights to 105 matches per season.

Ironically, some of the headaches involved in following your favourite Premier League team are guaranteed by the “no single buyer” rule that regulators applied to its auctions, ostensibly to protect consumers from higher prices.

Virgin and Eir deal

August has brought good news, for some. Virgin Media Television and Eir Sport have ended their stand-off and agreed to carry each other’s channels. While Virgin subscribers still can’t access BT Sport (or the new Premier Sports) through the platform no matter how much they’re willing to pay, they will now be able to watch Eir’s exclusive RWC games. Likewise, Eir customers who had been cut out of access to BT’s UEFA Champions League coverage, should now get to enjoy the Champions League glories of relative newbie Virgin Media Sport.

From this alone, it’s easy to see how the splintering of rights has become a source of exasperation and expense to viewers, who can suddenly find themselves locked out of access to the very sport they subscribed to watch. Pay-TV and broadband platforms are like bank accounts – the hassle involved means nobody likes switching. Viewers also resent being forced to prioritise one sport, or even one competition, while sacrificing the others.

But the days when sport was simply the automatic preserve of free-to-air broadcasters are unlikely to return.

At its new season launch this week, RTÉ director-general Dee Forbes announced that RTÉ was “set to remain the undisputed home of free-to-air sport in this country”. It was a carefully phrased statement, though Virgin Media Television might still dispute it.

Rory Best is tackled during the 2015 Rugby World Cup match against France at the Millennium Stadium in Cardiff. Photograph: ©INPHO/Billy Stickland
Rory Best is tackled during the 2015 Rugby World Cup match against France at the Millennium Stadium in Cardiff. Photograph: ©INPHO/Billy Stickland

In summer, RTÉ subsists on sport. This July, sport accounted for four out of RTÉ’s top five programmes and all of the top 10 on RTÉ2. But it doesn’t come for free. Last year, a FIFA World Cup year, RTÉ spent €42 million on sport, according to its annual report. This was the second-highest genre outlay after news and current affairs (€68 million). The RTÉ narrative in recent years has been one of budget pressures in an inflationary market. Occasionally, something has to give. There was open weeping, for example, after it lost the Six Nations to Virgin Media Television.

Price tags

While the actual cost of sports rights is almost always a tightly guarded secret, RTÉ and Virgin often hint that events are loss leaders that don’t quite generate as much advertising revenue as their price tag. They still have a beneficial halo effect on their brands. The hefty sums involved certainly haven’t deterred a commercial free-to-air broadcaster like Virgin from the pursuit.

In 2015, then known as TV3, its reward for snatching the rights to that year’s RWC was the highest ratings in its history, for Ireland’s game against France. Having launched its dedicated sport channel only last year, it would be a surprising U-turn if Virgin, supported by parent company Liberty Global, were to back away from the fight just yet.

Sky, however, has been cutting back on “peripheral” rights deals. This has allowed it to ramp up spending on original drama and other content, says Trainor, and broaden the mix for its subscribers. Yes, it turns out some people like to watch stuff that isn’t sport.

Enter Amazon Prime. It merrily took on Sky’s rights to men’s tour tennis, while it will soon inherit BT’s women’s tour rights. From Monday, subscribers prepared to do a little scrolling on its interface will find its exclusive UK & Ireland coverage of one of the four tennis majors, the US Open. But it is its UK-only rights to 20 Premier League matches this December that marks it out as the most active of the tech giants when it comes to sports rights in this part of the world.

There’s no time for anyone in this game to relax. The next wave of competition may yet come from sporting organisations that fancy selling direct-to-consumer, predicts Hartnett. The GAA, which since 2014 has streamed outside Ireland through its GAAGO venture with RTÉ, has been “ahead of the game” on this score, he adds.

And in a media market where the real “untapped value” lies in controlling your audience data, the more confident sporting bodies may be tempted to run both broadcasters and streamers completely off the field.

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