Disney on the football pitch
Setanta retires injured: can Disney score where it failed?
Footballers will not starve. The demise of Setanta should have removed the last broadcaster prepared to overpay for the game’s television rights but Disney has suddenly fallen for the lure of footy.
For once Sky is competing against a bigger corporation with an even deeper pocket, but Disney – whose ESPN subsidiary has snapped up Setanta’s English Premier League rights – is moving onto a field that has claimed many.
Television companies have such a belief that football will deliver audiences that they blow their whole budget to outbid rivals for it. ITV Digital went bust by overpaying for rights long before Setanta did the same. BBC and ITV’s terrestrial channels have emerged bruised from auctions. British Satellite Broadcasting was forced into a rescue merger with Sky because it could not compete with the latter’s soccer audiences.
Without Disney the Setanta rights would have gone for a song. The Irish company had a £392m three-year deal with the English Premiership, a £150 contract with the FA and another £125m with the Scottish Premier League, helping it burn through more than £400m of investors’ money before the administrators blew the whistle.
Even so Setanta failed to renew its 46-match a year Premiership deal this spring, settling for only 23 games. It takes more than that to get 1.2m subscribers to keep paying £13 a month.
The initial deal with the English Premier League is upto £500,000 a match below Setanta’s price but that is still over £2m for 90 minutes of play. The price for future seasons’ matches is much closer to the level that bankrupted Setanta.
Can Disney make the numbers add up? It has lower costs because it does not have its own retail channels but it thus has to rely on rivals – not least Sky – to show its matches.
Perhaps Disney can afford such experiments; perhaps this is the first brick in building a major presence in this field, but football rights have claimed many before it. The truth is, that to most broadcasters, they do not pay their way.
