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The broadcaster had a clear shot at the Premier League rights, then Brussels joined the match
It is difficult to underestimate the importance of Premier League football to BSkyB. To the satellite broadcaster's chairman, Rupert Murdoch, it is the at the tip of the "battering ram" sports offering that got pay TV off the ground in the UK.
Former chief executive Sam Chisholm said that after BSkyB first won the exclusive live rights to top-flight football in 1992, subscriptions rolled in as though it was "Christmas every day".
Today, more than 5m homes, out of a total BSkyB subscriber base of 6.6m, and a further 35,000-40,000 pubs cough up big sums for access to live Premier League games each month.
Yet, on the eve of negotiations for a new deal to broadcast games from the start of the 2004 season, Britain's most successful pay-TV operator finds this crucial contract under threat.
A European commission investigation into the way the game sells its live television rights could force BSkyB to share that access with other broadcasters such as the BBC or ITV for the first time in more than 10 years.
The EC is unhappy with the way the Premier League sells its television rights and has condemned BSkyB's monopoly over live rights as unfair and anti-competitive. Rather than the current regime of all 20 clubs combining to sell a single package of 66 games each season, the commission would like to see more games shown by more broadcasters.
Degree of hurt
If BSkyB is no longer the exclusive provider of footage of clashes between Britain's footballing elite, fans may cancel subscriptions, analysts and pay-TV executives warn.
"It is absolutely critical that Sky retains live Premier League rights because it is the product that drives the platform," one former Sky executive said.
The degree of hurt the EC could inflict on Sky depends on how many live packages are made available and how they are made up. One analyst, who declined to be named, said: "It depends on the degree to which exclusivity is breached. If five live games go to another broadcaster then it won't hurt Sky but if they lose, say, 20 big games to a terrestrial broadcaster, then customers may start thinking about cancelling subscriptions."
The EC investigation has spoilt what looked like being an enjoyable summer of negotiations for the satellite broadcaster as it attempts to bring down the cost of one of its biggest regular expenses.
In 2000, when the contract for 2001-04 was negotiated, competitive pressures forced the bidding on the rights up to a level where Sky had to pay £1.1bn for a three-year contract of 66 games a season. In 1992 it paid £304m for a five-year deal; in 1996 it was £670m for a four-year agreement.
The rival bidders of the 90s have since self-destructed or are unable to bid again. Cable firm NTL does not have the financial firepower to enter the race, pay-TV rival ITV Digital collapsed long ago, while the BBC, for all of director general Greg Dyke's desire to return live games to terrestrial television, would find it hard to justify spending so much licence fee payers' cash on a single sports deal.
Kingsley Wilson, a media analyst at Investec Securities, believes that BSkyB is the only player left in the game and pre dicts that the price it will have to pay to hold on to rights could drop.
"We believe £900m is a reasonable expectation," he said.
The Premier League refuses to comment on the prices it expects to receive. Many pay-TV experts believe it has missed a trick by failing to introduce its own channel. After leaving Sky, Mr Chisholm and his former deputy David Chance were briefly employed by the league to advise on rights sales. They suggested it start its own channel and invest in the long-term future of its rights.
Many club chairmen liked the idea, if only because it would scare BSkyB and keep the bidding level up, but as negotiations begin in earnest the league does not appear to have any recognisable pay-TV experts on board and the threat is dissipating.
Yet the EC still has to lay the ground rules for the next negotiating round.
"[The commission] certainly is a wild card," Mr Wilson said. "Look at what happened in Europe when football clubs had been selling individually - in Italy, the whole league was delayed a month because all the clubs hadn't got round to negotiating, and big names have gone bust. Brussels needs to take a good, firm look at whether they want to mess with the UK market."
BSkyB boss Tony Ball has warned that if rights are offered on a non-exclusive basis the amount he would be prepared to pay would plummet. "Exclusivity commands a premium, any reduction in exclusivity will take that premium down," he said.
BSkyB insiders have warned privately that domestic football's already fragile finances face "meltdown" if a large number of live packages are put out to tender. "It could destroy the game," said one senior executive. "The only reason why clubs could attract players like Eric Cantona, Thierry Henry and Juan Veron to the UK was because of the television money."
BSkyB has sought to minimise any potential subscriber defections caused by a loss of exclusive live Premier League rights, by positioning itself as "the home of football". It has bought rights to Europe's most prestigious club competition, the Champions League, and exclusive rights to the Nationwide League, the competition for lower division clubs.
At the same time, marketers have attempted to emphasise the choice of family entertainment Sky offers to the large part of the population who see it as a must-have subscription only for blokes who cannot do without their footy.
"We're as much about George Clooney and Shrek as we are about Wayne Rooney and Becks," one insider boasted.
Mathew Horsman, director of media advisory boutique Mediatique, believes that the loss of exclusive rights would have been far more damaging at the previous two negotiations, in 1996 and 2001. "The difference now is that Sky is a mature business established in nearly 7m homes."
Nevertheless, BSkyB will want to ensure that it gets all the live Premier League football games it can. Not for the first time, BSkyB faces a nervous wait to hear what the regulators decide. This time at least its apprehension will be shared by other broadcasters and football clubs.
The Guardian
It is difficult to underestimate the importance of Premier League football to BSkyB. To the satellite broadcaster's chairman, Rupert Murdoch, it is the at the tip of the "battering ram" sports offering that got pay TV off the ground in the UK.
Former chief executive Sam Chisholm said that after BSkyB first won the exclusive live rights to top-flight football in 1992, subscriptions rolled in as though it was "Christmas every day".
Today, more than 5m homes, out of a total BSkyB subscriber base of 6.6m, and a further 35,000-40,000 pubs cough up big sums for access to live Premier League games each month.
Yet, on the eve of negotiations for a new deal to broadcast games from the start of the 2004 season, Britain's most successful pay-TV operator finds this crucial contract under threat.
A European commission investigation into the way the game sells its live television rights could force BSkyB to share that access with other broadcasters such as the BBC or ITV for the first time in more than 10 years.
The EC is unhappy with the way the Premier League sells its television rights and has condemned BSkyB's monopoly over live rights as unfair and anti-competitive. Rather than the current regime of all 20 clubs combining to sell a single package of 66 games each season, the commission would like to see more games shown by more broadcasters.
Degree of hurt
If BSkyB is no longer the exclusive provider of footage of clashes between Britain's footballing elite, fans may cancel subscriptions, analysts and pay-TV executives warn.
"It is absolutely critical that Sky retains live Premier League rights because it is the product that drives the platform," one former Sky executive said.
The degree of hurt the EC could inflict on Sky depends on how many live packages are made available and how they are made up. One analyst, who declined to be named, said: "It depends on the degree to which exclusivity is breached. If five live games go to another broadcaster then it won't hurt Sky but if they lose, say, 20 big games to a terrestrial broadcaster, then customers may start thinking about cancelling subscriptions."
The EC investigation has spoilt what looked like being an enjoyable summer of negotiations for the satellite broadcaster as it attempts to bring down the cost of one of its biggest regular expenses.
In 2000, when the contract for 2001-04 was negotiated, competitive pressures forced the bidding on the rights up to a level where Sky had to pay £1.1bn for a three-year contract of 66 games a season. In 1992 it paid £304m for a five-year deal; in 1996 it was £670m for a four-year agreement.
The rival bidders of the 90s have since self-destructed or are unable to bid again. Cable firm NTL does not have the financial firepower to enter the race, pay-TV rival ITV Digital collapsed long ago, while the BBC, for all of director general Greg Dyke's desire to return live games to terrestrial television, would find it hard to justify spending so much licence fee payers' cash on a single sports deal.
Kingsley Wilson, a media analyst at Investec Securities, believes that BSkyB is the only player left in the game and pre dicts that the price it will have to pay to hold on to rights could drop.
"We believe £900m is a reasonable expectation," he said.
The Premier League refuses to comment on the prices it expects to receive. Many pay-TV experts believe it has missed a trick by failing to introduce its own channel. After leaving Sky, Mr Chisholm and his former deputy David Chance were briefly employed by the league to advise on rights sales. They suggested it start its own channel and invest in the long-term future of its rights.
Many club chairmen liked the idea, if only because it would scare BSkyB and keep the bidding level up, but as negotiations begin in earnest the league does not appear to have any recognisable pay-TV experts on board and the threat is dissipating.
Yet the EC still has to lay the ground rules for the next negotiating round.
"[The commission] certainly is a wild card," Mr Wilson said. "Look at what happened in Europe when football clubs had been selling individually - in Italy, the whole league was delayed a month because all the clubs hadn't got round to negotiating, and big names have gone bust. Brussels needs to take a good, firm look at whether they want to mess with the UK market."
BSkyB boss Tony Ball has warned that if rights are offered on a non-exclusive basis the amount he would be prepared to pay would plummet. "Exclusivity commands a premium, any reduction in exclusivity will take that premium down," he said.
BSkyB insiders have warned privately that domestic football's already fragile finances face "meltdown" if a large number of live packages are put out to tender. "It could destroy the game," said one senior executive. "The only reason why clubs could attract players like Eric Cantona, Thierry Henry and Juan Veron to the UK was because of the television money."
BSkyB has sought to minimise any potential subscriber defections caused by a loss of exclusive live Premier League rights, by positioning itself as "the home of football". It has bought rights to Europe's most prestigious club competition, the Champions League, and exclusive rights to the Nationwide League, the competition for lower division clubs.
At the same time, marketers have attempted to emphasise the choice of family entertainment Sky offers to the large part of the population who see it as a must-have subscription only for blokes who cannot do without their footy.
"We're as much about George Clooney and Shrek as we are about Wayne Rooney and Becks," one insider boasted.
Mathew Horsman, director of media advisory boutique Mediatique, believes that the loss of exclusive rights would have been far more damaging at the previous two negotiations, in 1996 and 2001. "The difference now is that Sky is a mature business established in nearly 7m homes."
Nevertheless, BSkyB will want to ensure that it gets all the live Premier League football games it can. Not for the first time, BSkyB faces a nervous wait to hear what the regulators decide. This time at least its apprehension will be shared by other broadcasters and football clubs.
The Guardian