“The opportunity exists for Scottish football to completely recalibrate. The option for bigger leagues and less, or indeed no reliance on tv money (that’s right….wave the subscription model goodbye) those not keen could be assisted to see if new leagues elsewhere will take them,” Jim Spence noted on social media.

A few of the comments to this are also worth noting before we hear from a London based senior figure in the sports marketing industry.

“Would that include clubs competing with each other for local support amalgamating? As happened in Inverness?” Auldheid asked, adding, “Less clubs = more players competing for a contract = lower wages but no loss of quality = sustainability. TV money caused hyper wage inflation in England with fallout in Scotland. Back to the days when crowds mattered in success terms.”

Paul Larkin added: “Jim, the problem is, take a clubs like Kilmarnock. A third of their turnover comes from TV. How do we change that?” while the former BBC Sports Reporter relied “That’s where recalibration comes in…..less reliance on tv income and seeking new streams….won’t be easy to wean off it.”

Pat Maguire had this to say. “Had the chance to do this when Rangers went into liquidation but instead decided to reward The EBT cheats with 54 titles.”

“The self-interest and total dominance of two clubs will be the only factors which determine if there is any recalibration,” Peter Clark argued, Jim Spence replied “That would depend on the courage of the others…..so you’re right.”

“Had the chance ages ago and Stewart Milne bottled it. Be interesting to see what comes of this,” Colin Thomson observed.

“Truth is Scottish leagues were more competitive when gate money was split and there was no reliance on TV money. Greed then got the better of some and we have never recovered and never will under current voting rules,” Stuart Simpson argued.

“About time our game was run for the fans and players, not TV companies,” James Muldoon said while Francis Glasgow added “Sky is killing Scottish football scrap it and get the pub and armchair fans to games.”

“Problem is the clubs want to sell their product to the highest bidder. Now I agree that’s not always the best package they receive in return. But it’s definitely a key time to think of restructuring the leagues to allow clubs and their young talent flourish as best as they can,” Ally Niven said. “Pay per view and football can run it itself. Cut out the middlemen. Every game to be screened,” Stephen Smith added.

“You must also remember many meaningless games when we had a larger league? Lots of other European countries have actually copied us to create more interest. Also no-one wanted a bigger league when it was anyone other than CFC winning it?” Billy MvDonald stated.

“Scottish football is far too bitter and petty for that Jim,” noted Kevin Anderson. “Just check social media. Forward thinking isn’t in the plan. The way Partick and Falkirk have been treated is diabolical. Even my club could have had a chance of survival. Tragic stuff led by amateurs,” Kevin Anderson stated.

“Should we be looking at clubs having the ownership of their own TV rights? To flog to whatever channel is willing to pay on a game by game basis? Developing their own club TV offerings as a base then flogging off high profile games to the highest bidder. Would be interesting,” Andy Lee said.

“I’d like to see the the leagues branching out and providing its own content without using sky bt etc. I’m sure there is plenty subscribers there that would be willing to pay for it,” Jamie Ross stated.

So that’s an interesting cross section of opinion from supporters of various clubs in Scotland. As mentioned earlier we’ve also got an interesting contribution on this subject from Will Muirhead who heads up Rocket Sports in London.

Before we hear from him a word about Celtic TV and the tremendous opportunity that exists for Celtic to take out the likes of Sky completely and own and operate their own high performance TV station themselves showing all of the clubs domestic games. This would if structured properly provide substantially more revenue to Celtic and all our opponents and other clubs could look at following the model.

There are many factors that look like emerging over the months and years ahead. Will the TV subscription model ever go back to what it was? Will stadiums like Celtic Park be able to go back to full capacity and if so when? If not what happens to the season ticket model and how can clubs provide supporters with access to the games if capacities are inevitably set to be reduced?

New thinking is going to be required. Has Celtic got the vision to deliver on this? For an English Premier League view on all this let’s hear from Will Muirhead. There are lessons in here for Scottish football in general and Celtic in particular to consider.

Premier League: covid-19 Induced Acceleration to a Private Equity backed OTT Future

The writing’s been on the wall for the sports industry for a long time, but the global shutdown of pretty much all live sport will accelerate the changes that have swept through all other media sectors.

Until now, the sector’s held up incredibly well. Live sports punctured the roll out of time-shifted TV experiences by proving to be the last bastion of appointment viewing. It’s successfully hopped from being the driving force behind expensive bundles of Pay-TV packages to underpinning the adoption and/or retention of broadband internet subscriptions. It continues to ride the swinging Punch and Judy-esque pendulum of short-form video kills long-form, “oh no it doesn’t, oh yes it does, oh no it doesn’t” and, probably most importantly, it now drives serious and attributable profit to broadcast partners through direct subscriptions.

Perhaps, not for much longer.

Covid-19

covid-19 could be the (rather large) straw that broke the camel’s back.

If the Premier League doesn’t deliver the prescribed amount of games to its broadcast partners, they will not be paid for. Broadly, that means a loss of £750m from worldwide broadcast revenue.

Further, they will lose match day revenue and exposure for sponsors, potentially doubling the pain, and if the players don’t take a pay cut, then the largest segment of their overhead will remain fixed.

Quite a headache.

A Post-Covid-19 World

Of course, sport will return, but how it returns remains unclear. Almost certainly, a number of games will be played behind closed doors. This should help relieve some broadcaster fee retention pressure but it won’t help with match day revenue.

When crowds are let back in, they may have to restrict seating (as is happening in China’s cinemas), halving the number of fans in attendance.

But then what? Sky and BT have allowed fans to pause their sports subscriptions – a move that could cost the broadcasters £700m. This can’t be recouped by playing the games at a later date.

That level of loss (nearly all of Sky’s annual profit) combined with the tsunami of factors that, to date, the live sports world has resisted being washed away by (cord-cutting, etc…), and the new reality of even faster subscriber exodus in the future, could spell the end of old broadcast model – they simply won’t want to (and won’t be able to) pay ever-increasing rights fees.

What Next?

Obviously, the future of sports media is for rights holders to operate their own OTT services and broadcast globally. That’s been clear for decades. The robust economics of the old model has been the main reason it hasn’t yet happened in any meaningful way.

To move to the new model, the Premier League (and other major rights holders) will need someone to bridge the gap because someone will have to underwrite the previously expected broadcast revenue whilst the direct-to-subscriber revenue builds.

That someone looks most likely to be a private equity player, a sovereign wealth fund, or, perhaps, a new fund created by the Premier League club owners themselves.

If 10m UK subscribers paid £30 per month each, the Premier League will double the revenue they generate from the UK market’s broadcasters to £10bn (over 3 years) – more than enough to cover new production, streaming and operations costs, as well as to provide private equity backers with, say, a 20% cut of the gross.

Not to mention saving *all* subscribing fans money and in many instances, about £500 per year each.

It will also mean that sports rights holders will be better placed to ride out any future outbreaks with a little bit more control over their own destiny.

A win-win-win?

Will Muirhead

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