Premier League Broadcasting: Setanta’s Demise, and the Rise of ESPN

The Recent PL Domestic Broadcasting Auction

In On the Ball 12, it was explained that at the turn of the year, Sky won five of the six auctioned packages for live Premier League (PL) matches for three years from the 2010-2011 season. Sky muscled out its then competitor Setanta by snatching one of the packages that had been previously won by Setanta. This article highlights the consequences of the latest PL auction for Sky, ESPN, Setanta and briefly charts the process that led to the untimely demise of the Irish broadcaster.

Setanta, who had won two live PL broadcasting packages in the last auction, were relegated to one package from the 2010 season. Only days after the auction results were announced Setanta’s very future was throw into doubt. Setanta would have had only 23 games per season to market and promote to its subscribers from 2010­13. The loss of one of the packages to Sky was seen by many analysts as the beginning of Setanta’s financial meltdown. The PL’s decision to reclaim its rights for the 2009-10 season (and subsequent 2010-13 package) after Setanta missed an extended payment deadline, meant that Setanta’s move into administration appeared a mere formality before it was finally confirmed on 23 June 2009. Only a day before Setanta’s administration announcement it had been publicised that Disney-owned ESPN had bought the rights to Setanta’s 09-10 package of 46 games and also the 23 matches to be broadcast from the 2010-13 season. Richard Scudamore, Premier League chief executive, said:

"The timescale of our process was tight, to say the least, and it is to the great credit of ESPN that they committed themselves to adding Barclays Premier League football to their already impressive portfolio of sports rights."                                                                            

Table 1: Packages Reclaimed by the PL from Setanta and re-auctioned and won by ESPN

It means that from the 2010-2011 season, Sky will screen five of every six live Premier League games. This converts into 92 games for the 2009-10 season and then 115 games for each of the following three years.

With the news that Sky won 5 packages and the re-auctioned Setanta package going to ESPN, it will be interesting to see whether:

• Sky increases the price of its Sky Sports offering to customers to claw back the additional cost of purchasing one more set of live games; and/or
• ESPN’s programming is modelled and priced differently to Setanta’s old channels.

Broadcast arrangements and cost

ESPN has unveiled plans to launch a new UK sports channel, imaginatively marketed as ‘ESPN’. It will launch on 3 August 2009. Live coverage will begin with Everton v Arsenal on the opening day of the 2009-2010 season. Alongside English and Scottish Premier League (SPL) football the channel will show some of the US sports to which ESPN owns rights. In addition, ESPN announced that its football coverage will include matches from the top-flight domestic competitions in Germany, Portugal, Russia and the Netherlands. ESPN has also secured the UK and Ireland rights to air the remainder of the Major Soccer League competition in the US, featuring David Beckham's LA Galaxy.

Customers who want to subscribe to ESPN will be able to purchase the channel through Sky, Virgin or other rival platforms. The new channel will operate as a "top-up" option on Sky's platform. Sky will also be responsible for selling advertising on the new channel and Sky Sports' in-house production team will act as producers for PL matches shown on the channel. Sky Sports customers will have to pay £9 per month, while non Sky Sports subscribers will be charged an extra £12 per month.

As part of a deal with ESPN, Virgin Media’s 3.5 million cable customers will gain free access to ESPN’s live PL coverage if they subscribe to its XL television pack. This is similar to Virgin’s previous arrangements with Setanta. Virgin’s subscribers to its M or L packages will be able to subscribe to ESPN for £10 a month or £8 a month if they already subscribe to any combination of Sky Sports services on Virgin.

ESPN's acquisition of UK football rights

Despite ESPN’s global presence their acquisition of PL rights marked the Disney-owned company’s first foray into the UK domestic market. After initially losing out to Setanta and Sky in the February 2009 auction, ESPN has now shown its intent by finally scooping live PL football in the UK.

As a result of Setanta’s administration, the SPL’s twelve clubs agreed to a £65m deal with Sky and ESPN to screen 60 live SPL games each season for the next three years across the UK and Ireland. Compare this to the £125m that Setanta had agreed to pay and it is somewhat understandable that the Old Firm Celtic and Rangers were at pains to stress their disappointment in the SPL for originally approving the Setanta deal. Celtic chairman John Reid said:

"Last year's decision to reject the Sky bid and opt for Setanta - arrived at against the strong opposition of Celtic, Rangers and Aberdeen - has proved to be the disastrous misjudgement we indicated it might be, with Setanta now in administration.”

ESPN however did not complete a clean sweep of the rights previously held by Setanta. Sky has agreed a three-year deal with The Football Association to screen the Community Shield with each game worth around a £1m.

As this season begins in earnest, a new broadcasting team of ESPN and Sky line up to broadcast one of the world's most popular competitions. With ESPN’s parent company, Disney, worth nearly twice as much as Sky's parent company News Corp, whilst the competition on the pitch will be as fierce as ever, the broadcasting stakes may begin to rise with a credible and well resourced alternative in ESPN.

For further information, please contact Daniel Geey.