Sky has refused to air a heavyweight advertising campaign for the rival channel which has now lodged an official complaint with Ofcom, the British broadcasting watchdog. Ofcom rules do not allow undue discrimination against advertisers and this is another in a list of ways in which the two are banging heads.
BT Sport was a surprise winner of the tender to broadcast 38 Premier League matches and effectively take over the position currently held by ESPN and previously by Setanta Sport as the ‘alternative’ to Sky Sports which has remained the principal broadcast partner of the Barclays Premier League since its inception in 1992.
The new channel, backed by Britain’s largest fixed line and broadband supplier has subsequently bought big in Premiership Rugby and Women’s Tennis and has the muscle and the intent to really present a major challenge to Sky.
Sky claims that it has made a multi billion investment in building a 10 million strong audience for Sky Sports and that it would be wrong to simply offer full access through direct advertising of a rival brand but that BT Sport is free to run its campaign on other channels outside the core sporting package.
Sport is increasingly being seen as the most valuable area of broadcasting, presenting as it does a menu of live action that viewers want to watch as it happens, often in tandem with a second screen experience through their mobile phone or tablet. This makes it valuable by removing the threat of time shifting that enables people to skim through advertising.
It is the same principle that has created such blockbuster live TV ‘events’ as the X Factor and The Voice.
An article in today’s Financial Times intimates a sale of international sports management group IMG at a value of more than $2 Billion. That level is buoyed by the fact as outlined by CEO Mike Dolan, that “media companies looking to invest in sport are looking to get in early and get in long,” and that broadcast is the main driver of the continued escalating importance of sport to business.
The terms of subscription to BT Sport’s new channels in Britain or Ireland has not yet been released but it is clear within the market that Sky in particular are placing a premium on their sports service with advertisers and are looking to sign up exclusive sector based deals that will tie up much of that revenue which might otherwise be diverted to the new arrival.
ESPN was ‘bundled’ with the Sky Sports package here but that is not likely to happen at least in the short term which means an additional charge will now be faced by those who want to have all the channels at home or in pubs and clubs who have long looked on the provision of live sports TV not so much as an additional but an essential service to attract trade.
BT’s investment is in part to secure a place in Sports TV but also to defend its core businesses against Sky’s move into broadband and telephone services via “bundled” deals with the TV broadcast packages. Sky has this week started a €10 million campaign in Ireland to build the broadband business it bought from O2 last month.
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