As rights for the next three-year cycle of English (Barclays) Premier League come up for grabs, operators and channels are bracing themselves for a soccer spending spree that spirals ever upward. Is the EPL (BPL) really worth the revenues it commands and can those costs realistically be recouped? Asks Magz Osborne Apart from the FA Premier League’s UK home market, Asia Pacific is home to the two countries that spent the most on the last three-year cycle (2007-2009), namely Hong Kong and Singapore. It is Singapore, the FA’s second-most lucrative market in the world, that is attracting the most interest of late, since it was reported that the Media Development Authority (MDA) is believed to be looking at intervening to prevent the costs of broadcast rights escalating any further. MDA is planning talks with rival pay-TV operators StarHub Digital Cable and SingTel mio TV, amid industry fears that competitive bids for the EPL rights will ultimately impact the consumer. “In late 2008, the Media Development Authority (MDA) commissioned a study on competition issues in convergent media and telecomms markets. SingNet and StarHub Cable Vision were interviewed by the appointed consultants in the course of the study. The study is on-going and it is premature to comment at this stage,” said Eileen Ang, Head (Competition & Market Access), Media Development Authority. “MDA will be engaging in further discussions with relevant stakeholders at an appropriate juncture.” StarHub Digital Cable paid around US$150 million for the current 2007-2009 seasons, three times what had been paid for the previous three-year cycle. Rival telco SingTel had previously made public its intention to make soccer and HD two key offerings for the Q4 2007 launch of its new IPTV pay-TV service mio TV. One analyst has gone so far as to say that a bidding war between StarHub and SingTel for the Singapore rights could hit US$400 million this time around, raising continued concern that this cost would be passed onto the consumer from 2010. MDA is already responding to complaints from football fans as the price of StarHub’s sports package has almost doubled at the start of each new cycle – rising from S$8 to S$15 per month in 2004; to S$25 per month from 2007. Despite these price hikes, StarHub’s head of content Kathleen Syron, says the operator has borne much of the burden. “BPL is definitely not a profit-generating entity for us, and the price for our sports package certainly does not cover the full cost of Premier League rights,” she says. Selena Ho, director, content acquisition and marketing at SingTel’s mio TV agrees that major sporting events such as BPL attract a disproportionate share of rights revenues compared to what can be realistically recouped by broadcasters. She also says that major events commanding huge rights fees, “is detrimental to less popular events and local events as the major events have soaked up all the money.” Assenting that BPL is one of the more popular sporting events in Singapore, mio TV’s Ho prefers “not to comment on market rumours” about MDA’s possible intervention, however she says there is a saturation point when it comes to rights. “There is always a threshold on how much we will pay for a product, so yes, there will definitely be a saturation point when it comes to rights cost.” StarHub’s Syron says that meeting consumer demand comes before cost-counting. “The cost of securing major sports events has never been cheap. Our main focus has always been on our customers, and on offering quality and appealing content. We will continue to bring in as many major events as possible within means.” “Without doubt, Barclays Premier League (BPL) is one of the most popular and most watched sporting leagues in the world, which has a significant fan base in Singapore. Other major sporting events that are popular in Singapore include auto racing, golf, cricket, rugby and tennis. These major sports events are part of the many sports programmes that make up our sports package. StarHub presently offers 18 sports channels featuring genres ranging from badminton, basketball, cycling, rugby, table tennis, hockey, golf, football to tennis.” Asked for StarHub’s stance on MDA’s possible intervention to encourage collaboration rather than competition, Syron said, “The broadcast rights for BPL are currently offered on an exclusive basis with strict terms that do not allow for resale between pay TV operators. The rights will be sold through a competitive bidding process.” She adds that rising content costs is an issue across the board, not just for sports rights. “Sports programming certainly has some popularity. However, the cost of all content, not just sports content, has been increasing in recent years and is likely to continue rising.” In terms of possible outcomes, some say that, given their strong programming line-up across the board, StarHub relinquishing the BPL rights would have minimal impact on their 500,000-strong subscriber base. But, say others, while subscribers might not desert the cable operator, sports package subscriptions would definitely be impacted and it would give SingTel the chance to boost subscriber numbers from its current 50,000 mark. Regarding MDA’s possible intervention, ABU’s John Barton says, “All they need to do is look back in time to see the reasons for the merger between ESPN and STAR. Murdoch is not one to pay over the odds for anything and he grew tired of the bidding war between the two broadcasters for top shelf sports. The relationship is uneasy in many respects, but in business there is little point in being sentimental. This was a bottom line decision to cut down the cost of sports rights purchases brought about by competition. And it has worked very well since the mid-nineties. Our position is simple. If competition improves the range of programming and a lower cost, and quick easy access then we are all for it. In this case competition will drive up prices and that is exactly what the property owner wants to happen.” According to trade publication TV Sports Markets, only in two markets, the UK and Nigeria, does legislation exist preventing the sale of exclusive rights to a single operator and in neither did it prevent rights fees from rising in the last round of deals. In which case it looks as if there will only be one winner in the upcoming bidding war, and that will be the rightsholders.