Are British fans paying over-the-odds to watch football on TV?

by John Howell

Last week, news broke that Virgin Media has requested broadcast regulator Ofcom to open an investigation into the way that the Premier League sells the television rights for their live football games.

Virgin say the auction process is driving up prices for fans and causing “significant consumer harm”.

It’s not something any regular fan thinks about too much. Yes, you’ll hear the odd gripe down the pub during a Sunday game; “Footballers these days are paid too much!” and right they are. But you don’t often hear someone raise the issue of broadcasting fees.

Last year, Premier League bottom side Cardiff City earned double the amount that Bundesliga giants Bayern Munich in TV rights. It’s a staggering fact, £58.2 million staggering to be precise. With that in mind, perhaps Virgin has a point.

The price for the latest Premier League rights deal – covering 2013-16 – rose 70 per cent to £3bn when it was announced in 2012. Virgin claims that British fans pay the highest prices in Europe for their Premier League fix.

So with the next auction due for 2015, Virgin is essentially asking for a favour from Ofcom to help them drive down the amount of money they need to pay in order to broadcast football on their television. At the moment, Virgin pays both Sky & BT sport for the privilege to air their games. With an increase in bidding expected next year, Virgin will have to stump up more to their rivals.

Their complaint may not have the consumer at heart as Virgin pretends it does, but it has raised some interesting issues.

The sports bundle offered by Sky currently stands at a whopping £34.99 monthly, whilst BT offer at £12.00 for the same period, but BT show far less Premier League games. To watch Sky Sports on a one day pass costs £6.99, that’s a pound more than an entire month’s subscription to streaming giant Netflix.

British fans do pay more than anyone else in Europe, but we allow ourselves too. Football is ingrained into our screens, home or pub, and if Sky or BT adds a few pounds extra to a subscription, consumers won’t bat any eyelid as we’ve previously seen.

The introduction of BT Sport drove up the price for Sky who had to go toe-to-toe with their contenders in order to secure their share. It’s only expected to get worse; prices will not be going down in the coming auction.

John Petter, managing director of BT’s consumer business, told The Guardian in August: “[Sky] have to put all their chips down in round one [of the next Premier League auction] or risk losing. If they end up with [fewer Premier League games] than they have today it poses a problem, as they would be charging a subscription and diluting their offering. They have to go for a very strong holding of rights.”

Virgin are hoping for bidding to be capped at a certain amount, or divided more effectively, in order for themselves to reap the rewards.

Should they succeed, it will pose problems for Premier League clubs, especially those in the bottom half of the rung. The enormous amount of TV revenue allows smaller clubs to compete somewhat in transfer windows and helps balance books for the future – any cap or decrease in income could spell disaster.

Abroad, Real Madrid and Barcelona are able to sell their own TV rights for hundreds of millions worldwide, it leaves smaller clubs in Spain, e.g. Levante or Granada, struggling to survive, let alone compete in La Liga. The Premier League’s distribution is much fairer in its split, something La Liga is now looking to implement.

The income also allows for investment in stadiums, facilities, and youth systems. Surprisingly (or unsurprisingly some might say) it hasn’t dented the price of a Premier League ticket, which on average has risen by more than four per cent.

The moral of the story is that yes, there is too much money in football, whether that be TV rights or otherwise, but we allow there to be. We give ourselves to the game, live or broadcast, and this will not stop at the next auction. Virgin may raise the point, but it won’t be heard in the long-term.

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