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[August 14, 2014]
The real Premier League rivalry kicks off: Sky Sports v BT Sport
(Guardian Web Via Acquire Media NewsEdge) José Mourinho versus Arsene Wenger; Manchester United against Liverpool; Frank Lampard trying to boss Steven Gerrard in midfield – the new Premier League season will again be littered with old rivalries when it kicks off on Saturday lunchtime.
Not least will be the competition played out on television screens between Sky Sports and BT Sport, which enters its second season with many fans believing that the new entrant is showing signs of holding its own.
This season's added dimension consists of a new head-to-head between the channel's analysts: Sky's star performer Gary Neville against his former Man Utd and international team-mate, BT's new signing Paul Scholes.
Initially this appears a mismatch. Neville has established a stellar broadcasting reputation after being propelled on to our screens following the swift professional demise of his predecessor Andy Gray amid accusations of sexism.
Scholes meanwhile has spent most of the past two decades captivating football fans with incisive passing, but rarely with his public utterances, which have almost always seemed to bore the orator as much as his listeners.
Yet despite a slight change to that approach (Scholes' comments before the World Cup about why England should drop Wayne Rooney being the obvious example) there does seem a discernible nervousness at BT about how its new signing might perform. Having watched Scholes in pre-season rehearsals, is he a decent broadcaster? Simon Green, head of BT Sport, is equivocal. "I think he'll be a fantastic broadcaster," he says. "He is a modest person and an intelligent footballer, who works hard. All [broadcasters] have to do a lot of work. All can improve. It can be difficult finding time to gain experience on air – because you really only get that by being on air." Green won't say if Scholes was his first pick as a new analyst – "he was on our shortlist," he blocks – although there is a chance that other signings may yet strengthen BT's squad, which also now includes Chelsea manager Mourinho. But despite these arrivals and last year's encouraging start, in broadcasting terms BT Sport remains way behind Sky.
That is partly to do with the rights each side possesses. BT spent £738m over three years for 38 live Premier League matches a season, including 18 "first picks". But, to put that into perspective, Sky paid a total of £2.3bn for 116 matches per season over the same period, with 20 weeks when it gets its choice of games.
Sky's ubiquitous advertising also boasts how 49 of the top 50 most viewed fixtures last season were on its channel. Furthermore, it is understood that BT's most watched match – Manchester City's 2-1 victory over Liverpool on Boxing Day, which attracted around 1.8m viewers –was 50th on that list. Extend the list to the top 80, and 77 were Sky's.
To keep the statistics rolling, last season's best viewed match came in April when Chelsea blew the title race wide open by defeating Liverpool 2-0 at Anfield - it was watched by more than 3 million people on Sky. Meanwhile, it is thought that BT's Saturday lunchtime show is attracting around two-thirds of the viewers that Sky did when it owned that slot.
However, while the current on-screen match-ups look unlikely to end with a quick BT win, the opposite appears true when you analyse its moves from a corporate perspective.
While all the focus has been on the television market, BT's estimated £500m-a-year investment in its sports channel is not about building a broadcasting business at all. The real motivation has always been to use sports rights to protect its traditional communications revenues – particularly high-speed internet services – which is why the company offers free Premier League football to its 7.4m broadband customers.
Even Sky insiders acknowledge this strategy has worked for BT, admitting that the telecoms group has gained 580,000 new broadband subscriptions in the 12 months to the end of June, against its own 340,000. BT adds that it has netted more additional broadband customers than Sky in each of the past four quarters since BT Sport's launch, turning the tables after the previous seven quarters when Sky had consistently won more. The rate of defections from BT phone line customers is also slowing.
A research note published in June by the independent analysis firm Arete added: "BT's investment in premium sports rights still seems misunderstood. Immediate direct revenue and cost benefits may not cover BT's annual £500m bill for rights, production and promotion, but reduced line loss, growing broadband share, fibre take-up, lower churn and better retention all imply 'losses' are closing rapidly." BT's full year results to the end of March showed BT Consumer growing its revenues by 4% – £173m – to £4bn. Part of that would have been the 19,000 pubs and clubs that have signed up to BT Sport paying an average £200 a month, implying yearly revenues of about £46m.
So does this mean that the business strategy is proven, freeing BT to further encroach on Sky's turf in the future? In November BT shocked the sports world by paying almost £900m to poach the rights to the Champions League from Sky – and the City is continually speculating that it might look to increase its Premier League rights in the next auction.
John Petter, managing director of BT's consumer business, said: "They [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." Which means Sky Sports boss Barney Francis now faces criticism either way. If he says he will fork out whatever it takes to maintain his channel's Premier League position, City analysts will moan that he risks overpaying. If he stops short of such a commitment, he will be accused of lack of ambition. What is more, this battle hasn't even kicked off yet: the Premier League has yet to even set the auction rules.
"We don't know what they are selling right now. That is in the Premier League's gift. But we will know exactly what we are after," Francis said, before shrugging off the suggestion that the auction will be a huge pressure moment for his business: "This job is full of pressure moments." That blasé bravado appears instinctive, and ingrained within the pay TV group. Sky Sports always seems convinced it is world class in at least two disciplines –broadcasting and marketing – hyping what it has to the maximum.
Over at Sky Sports News, journalists following up stories are billed internally as the "investigations" team – as if they were sports reporting's answer to Woodward and Bernstein rather than hitting the phones to check with football agents if there is any truth in the latest transfer rumour. Elsewhere, anybody who has seen the adverts for the new European football channel might believe they are getting much better coverage for their subscriptions. In fact, the extra rights are the Dutch league and the European Championship qualifiers (excluding England matches).
These are tiny gripes, but they do occasionally grate, especially when the slick Sky marketing people overshoot. After winding up the discussion on the next Premier League auction, Francis segued as smoothly as one of his presenters to his boyhood cricket career, trumpeting that he played for Nottinghamshire under-15s.
Really? Stalwarts of that team have no recollection of him. Luckily for Sky Sports subscribers, his television service is more memorable.
(c) 2014 Guardian Newspapers Limited.
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