Issues on abolition of exclusive sports broadcasting rights
Organised professional sports thrive on the revenue they generate from live broadcast of matches and other marketing ventures. The world over, professional golfers, footballers, boxers, basketballers, American football players and tennis stars, among others, are among the highest earning professionals because television generates so much from live broadcast of the events, which fuels the millions of dollars they earn yearly.
The English Premier League, Spanish La Liga, Italian Serie A, German Bundesliga, Major League Baseball, Major League Soccer, the NBA and tennis’ ATP series are among the highest paying competitions in the world. The recent world heavyweight boxing title bout between Deontay Wilder and new WBC champion, Tyson Fury, generated more than $160 million from television alone and $18 million at the gate. Thus, the fighters, who had earned $5 million before the fight, are expected to earn more than $20 million more as percentage from the pay-per-view broadcast of the fight.
According to a report by Deloitte Sports Business Group’s yearly review of football finance, the “big five” European football leagues (England, Spain, Germany, Italy and France) generated a record £13.8 billion in revenue in 2017/18, which was a six per cent increase from the previous year.
English clubs have also dominated Europe during 2018/19 as well, with both major club competitions producing all-English finals.
The 92 professional soccer teams in the English Premier League (EPL) and the three divisions below have amassed a record £5.8 billion ($7.3 billion) in revenue during the 2017/18 season, topping the table of Europe’s elite leagues.
The report states that the European football market is now estimated to be worth £25.1 billion. In revenue terms, the Premier League continues to lead the way and is 72 per cent larger than its nearest competitor, Germany’s Bundesliga.
The value of the Premier League’s overseas broadcasting rights for 2019-22 has risen 35 per cent to £4.35 billion, ensuring that the league’s overall rights have gone up in spite of a fall in the value of the domestic market.
According to telegraph.co.uk, the increase in foreign rights, revealed in new figures from SportBusiness Media, is slightly more than Premier League insiders had envisaged, and means that 46 per cent of all the league’s broadcasting revenue now comes from overseas. The deals cement the Premier League’s position as earning more money from overseas broadcasting than any other sports league in the world.
“The rise in overseas rights explains why the largest Premier League clubs pushed – successfully – for overseas revenue to be divided up on a new merit basis from this cycle, with teams at the top of the table receiving a greater share of the cash.
“Previously, all 20 clubs received an equal share of the overseas broadcasting revenue. There are concerns that this will damage the Premier League’s competitive balance, as The Telegraph first reported in March,” it said.
The increase in broadcasting cash has been driven by Europe. In the 2019-22 broadcasting rights cycle, the European market accounts for 30 per cent of the league’s total international fees, according to research by SportBusiness Media. It finds that four of the five largest percentage increases in this rights cycle were in Europe, as the Premier League’s popularity on the continent continues to increase.
In sub-Sahara Africa, SuperSport has held a long-running stranglehold on rights to the Premier League, the top division of club football in England.
SuperSport’s current contract with the Premier League, which expired at the end of the 2018-19 season, was extended for three more seasons taking in the 2019-20 to 2021-22 campaigns.
The award of rights is for the broadcast territory of sub-Saharan Africa, including South Africa, with SuperSport a Premier League partner since the competition’s inception in 1992.
SuperSport broadcasts all 380 Premier League matches per season live on all distribution systems, including television, internet and mobile. The broadcaster said it sealed the renewal following a “competitive” tender process.
The free-to-air broadcast rights for most of the European sports competitions are held by the Infront agency, which markets them to other interested broadcasters.
The contract will run from 2019-20 to 2021-22 and covers over 40 sub-Saharan countries, including major territories such as South Africa, Nigeria, Ghana and Kenya.
Under this arrangement, broadcasters are allowed to show one live match every Saturday, as well as weekly preview, magazine and highlights programmes.
The project is managed by Infront’s recently-created Africa division based in Paris, which focuses on distributing media rights across the continent.
Pay-television broadcaster SuperSport acquired exclusive pay-television rights to all matches and free-to-air rights to matches outside the Saturday 3pm kick-off slot in sub-Saharan Africa, including South Africa, for the 2019-22 cycle in 2017.
The European broadcast outfits make a lot of money through selling the rights to interested parties.Unfortunately, while actors in the Western sports industry rake in millions of dollars from broadcast rights, Nigerian sports have nothing to show for its huge human resources. Rather, the broadcast outfits with the license from the right owners make all the money.
Supersport, StarTimes and other satellite broadcast outfits rake in millions of naira from subscribers, who pay monthly for access to these competitions.
The local broadcast outfits are completely shut out from the market because most of them do not operate as profit-oriented ventures. They rely on government patronage to remain in business.
Again, where as the English Premiership and the big four leagues are among the highest earners in the entertainment world, the Nigerian Professional Football League (NPFL) is not even on television and therefore is completely shut out of the huge television money available in the system.
Until a few years ago, matches of the NPFL were broadcast live by SuperSport; but the contract was mutually terminated due to issues that bordered on integrity, and respect for contractual agreements.
Now, all the satellite broadcast outfits in Nigeria are fighting for shares from the European and global sports market, with none interested in helping to build the Nigerian market.
More worrisome is that rather than seek ways to help the Nigerian sports industry enjoy the same type of revenue their European counterparts get, the Federal Government is trying to democratise the acquisition of the broadcast rights for European and other Western sports competitions.
Recently, Information Minister, Alhaji Lai Mohammed disclosed that the Federal Government would no longer allow the monopoly of the broadcast rights to such competitions as the English Premier League (EPL), Spanish La Liga, UEFA Champions League, Europa League, CAF Champions League, Tennis grand slam tournaments, boxing and other top sporting championship.
The minister said the move would help the local television stations, including the NTA, Silverbird, TVC, LTV, AIT and other privately and state government owned outfits, grow. He added that it would also create an open market and healthy competition among television stations in the country, who would also want to showcase top class sports championships.
The Minister specifically directed NBC to implement a new regulation mandating broadcasters and exclusive licensees to share such exclusive rights with other broadcasters.
“This regulation prevents the misuse of monopoly or market power or anti-competitive and unfair practices by a foreign or local broadcaster to suppress other local broadcaster in the television and radio markets.
“This is so, having removed exclusivity from all content in Nigeria and mandated the sharing of all content upon the payment of commercially viable fees,” he said.
Mohammed said the new regulation was contained in the report of the committee he set up to work out the modalities for implementing the recommendations approved by President Muhammadu Buhari to re-position the broadcast industry.
The minister stressed that the break in monopoly would boost reach and also maximise utilization by all broadcasters of premium content, in order to grow their platforms and investment in other content.
He said: “Monopolies stunt growth, kill talents and discourage creativity. In the case of Nigeria, it’s the monopoly of content that breeds anti-competition practices.
“You cannot use your financial or whatever power to corner and hold on tight to a chunk of the market, preventing others from having access.“Such monopolies are crumbling everywhere in the world and Nigeria cannot be left out.”
Nigeria is not the only country trying to break monopolies in the broadcast industry.Recently, the Independent Communications Authority Of South Africa (ICASA) took a similar step by unveiling Draft Sports Broadcasting Services Amendment Regulations 2018.
The bill is aimed at making big sporting events accessible for free to all citizens of South Africa.
Noble as the move is, some stakeholders in the broadcast industry say it is anti-industry. They believe the move would promote indolence and mediocrity and also serve as a disincentive to foreign and local investors, who build their businesses through careful investment in equipment and human resources.
Multichoice, which operates Supersport, and StarTimes are currently the leading satellite broadcast outfits in Nigeria. Between them, they hold the bulk of the broadcast rights for international sports competitions.
For the minister’s plan to come true, some argue that it would mean that Multichoice and StarTimes would either be restricted from acquiring these rights, or be forced to pool resources with other outfits to buy such rights.
Yet, there are those who see the government’s latest move as what the industry needs for proper growth.
According to the Chief Executive Officer of Temple Management Company, Idris Olorunnimbe, whose company specialises in sourcing and developing sports talents and entertainers, among others, breaking DStv’s English Premier League will not in any way stop other foreign investors from establishing television stations in Nigeria.
“In the aspect of competition and giving opportunities to other television stations, I think the Federal Government has done a good job by trying to give room to local television stations to bid for big championships like the EPL in a competitive manner.
“The recent pronouncement will give opportunity for technological development and also financial growth.
“We know who the leaders are when it comes to technology and the financial capacity to buy the best content. I don’t think DSTV will want to leave the country because this pronouncement has given them the chance to fight harder to be the best… in business; it is competition that brings out the best.
“When it comes to foreign investment, we should remove the fact that DSTV is a foreign company. It is DSTV Nigeria, the station can also be regarded as a domestic station despite the fact they have affiliations or continental subsidiary in South Africa and other parts of the world. That does not make them different from the local stations in Nigeria.
“The capacity to fight to get the required rights is open to every station in Nigeria,” he said.
Olorunnimbe recalled that a defunct company wholly-owned by Nigerians had the rights to the EPL and the UEFA Champions League, but could not sustain them before it went under.
“So, you will understand that there had been the opportunity in the past for the domestic investors to compete.
“If some people are saying that government should invest on NTA to compete favourably with the foreign stations, it surprises me because there has been reports that government alone cannot fund NTA.
“So, where will the funding come from to meet the standard set by DSTV?
“Monopoly is bad… it is good to allow competition in the sports broadcast business, but we should not try to stifle healthy competition.
“DSTV has the best HD capacity to transmit life programmes in the country. I have had the opportunity to be in their crew; when they are moving, it is like an institution is moving.
“They have high technology base. Can other stations match this standard?
“In terms of development, Multichoice has helped in promoting athletes from the grassroots, especially in boxing, football, athletics and other sports. But the Nigerian population is large and we need more stations to join them in promoting sports at the grassroots.”
Founder/President of HS Media Group, Taye Ige argues that if the Nigeria Television Authority were well funded, it would compete favourably with the foreign stations, which would in turn help the local stations to grow.
“The NTA has the equipment and the widest reach in the country. But I don’t think the government should be in a haste to push out the monopoly held by DSTV.
“They should wait till 2022 when their contract expires and now give a level playing ground for other local stations to bid for rights to air special sports programmes.
“This present pronouncement will help other local stations to compete with Multichoice. The competition will not have any implication on foreign investment because DSTV has worked hard to be the best.“Our local stations will have to up their game to be relevant in the scheme of things. You should realise it takes millions of dollars to buy rights, which everybody must bid for.
“What is see in this is that government is trying to create a level playing ground for all in sports broadcasting.”
Former Golden Eaglets Coach, John Obuh hailed the government for trying to create an open market for others to compete with DSTV, adding, however, that the NTA and other stations need to up their game.
“The pronouncement has opened doors for other foreign stations to come to Nigeria and compete for rights to air sports programmes.
“If DSTV still gives the best content, Nigerians will still patronize them. South African stations show top class sporting championships, so why should Nigerian stations not do so?
“If DSTV is not ready to remain in the country to compete, they also have the right to leave the country. The government has opened doors for more local and international stations to compete favourably for top sports contents,” he said.
Former Super Eagles Coach, Adegboye Onigbinde wants the government to handle the issue professionally so that no party would be offended or feel cheated at the end of the day.
“In life, there is room to bring new ideas as the times change. Government has done a good job by now trying to create a level playing ground for television stations to compete.
“This will give other local stations the chance to be better in their service delivery.
“The government should not be seen as trying to favour any organization with this new arrangement. This will go far to bring healthy competition and as well pave way for better content delivery.
“With this move, more foreign investors will now like to come to Nigeria and also bid to air sports programmes,” he said.