European Super League Debacle Heralds Change For Sports Broadcasting

The dramatic volcanic eruption of the European Super League (ESL) may have been short lived but the ash spewed out will disrupt the field of sports broadcasting for much longer and likely accelerate change towards a new order.

It may have been panic over imploding revenues during the Covid-19 pandemic as crowds were kept away that sparked the naïve move, but pressure had been gathering some years among big clubs increasingly convinced they could generate more revenue by exploiting their dominance and support.

This was probably correct over the short term, when we consider that some of these top clubs such as Manchester United have around 1 billion fans and followers around the world. If even 10% of those could be persuaded to fork out just $1 on a pay per view basis for each match, that would add up to about $2.5 billion a year each, about 5 times the current total revenues of these clubs and that includes other sources of income including gate receipts and sponsorships. The feeling then among some owners is that at present their revenues are being diluted by other teams in their leagues that are hardly known outside their countries.

This reckons without the culture of football, or the structure of the game that relies on support for the grassroots to produce a constant stream of young players from which the big teams ultimately select. There has to be a more harmonious connection between the “head” of any new league, and the “body” of domestic leagues that feed it, without permanent members free from jeopardy because they are never relegated.

Yet however the debate goes, it is clear the ESL debacle has highlighted the instability of the current financing model for top football based primarily on TV rights and the disruption occurring as pressure grows both for streaming and Direct To Consumer (D2C) transmission of games. It has brought to the surface the power struggles underway between the big leagues with their broadcasters and the clubs, with streamers looking on eager to seize a major stake themselves. This struggle has been animated by the impact of streaming alongside the increasing globalization of football’s major leagues and tournaments.

This can be seen by going back to an earlier major disruption in the UK when the English Premier League (EPL) was created in 1992. At that time, its formation was driven in part by one operator/broadcaster, Sky, which gambled on their being enough fans not always attending the games themselves willing to pay substantial amounts for subscriptions to packages of games. So it proved, and for well over two decades subscriptions increased, but over the last few years it has appeared that the peak has passed in many European countries as for the first-time revenues raised from rights auctions were below those of the previous round.

Until quite recently, the quality of streaming services was not sufficient to make much impact on traditional sports broadcasting, with the rights model remaining localized to individual markets or countries. Even as streaming started to intrude that model persisted, noting how Amazon for example has taken rights for top tier sports such as the US National Football League (NFL) and also the EPL, just within the host countries.

Meanwhile, global deals were already starting to be struck for second tier sports like swimming, or even ones just below the very top tier like tennis. The ESL proposal then was seismic in that it threatened to open out rights to what might have become the most popular football tournament in the world to essentially global deals that could have been tuned locally, with options for pay per view, or at any rate trials of various D2C business models. It was notable that traditional broadcasters were not involved in the ESL.

It is also true though that the ESL was quickly dropped like a hot potato by various parties, at least some of which must have been aware of the proposal and given it at least some encouragement behind the scenes. It is hard to see how else a proposal so seemingly naïve ever got to the stage of being announced initially as a done deal.

UK Prime Minister Boris Johnson is among those accused of having prior knowledge of the deal, as well as sports streamer DAZN and even Sky itself, now part of the US Comcast media group which also owns NBC Sports in the US. All of these were quick to distance themselves from the movement, or condemn it outright, as soon as it became clear how toxic it was and how virulent the backlash from fans, players and pundits alike, as well of course from all those teams excluded.

Even before the ESL’s brief moment in the limelight there had been signs of change and disruption elsewhere in Europe. The bulk of Italian Serie A top league football has gone over to streaming with DAZN for the three seasons between 2021 and 2024, ousting Sky Italia as the primary broadcaster and paying slightly less per game than the latter agreed to in the last 2018 negotiations.

Then French topflight football has descended into almost existential crisis following expulsion of the Spanish Mediapro group at the end of 2020 as the current rights holder. Mediapro had agreed in 2018 to pay almost $1 billion a year for domestic TV rights to France’s top two divisions, Ligue 1 and Ligue 2, until 2024. The group then established a subscription sports channel Téléfoot to cover the matches and at €25 per month required around 4 million subscribers to pass breakeven point.

It was already falling far short of this mark when the Covid-19 pandemic emerged to turn the screw, and numbers failed to exceed 600,000. Finally in two months late in 2020 Mediapro failed to make its rights payments and the deal collapsed, leaving revenues for the top Ligue 1 only about half what had been expected. Canal Plus, which has been ousted by Mediapro’s more generous but, as it turned out, unsustainable offer, has come back in to pick up the pieces, but will only pay about half as much per game. The first major casualty appears to be Ligue 1 club Girondins Bordeaux, which has just gone into administration.

This gives some idea of how close European football more widely is to implosion, as even big clubs have gone into debt to cover the high transfer fees and player wages needed to stay competitive. A correction is overdue, but meanwhile the drive towards more global streaming rights models hinted at by ESL will continue even after its collapse.

There are also implications for broadcasting technology as football increasingly has to compete with other sports and eSports, as well as other forms of content around gaming and entertainment, for new fans and younger viewers. This trend has been accelerated by the absence of fans at grounds during the pandemic, which has put pressure on all parties to make matches more attractive to watch, beyond simulating crowd noise in the manner of the now largely abandoned canned laughter injected into TV sitcoms.

This has given a boost to video technology firms such as Iceland’s OZ Sports, which partnered with visual content studio RVX Productions to apply AR (Artificial Reality) to enliven coverage of empty stadia during matches. This led to development of OZ Arena as part of the wider OZ Connected Stadium platform, aimed at football and allowing spectators to be added dynamically but under control of viewers. Fans can select their avatar, club shirt and appear in their previous seat shouting encouragement via an app. How well such rather whimsical capabilities have caught on is not clear, but it does herald a new era in application of AR and other technologies to enrich the sports viewing experience as leagues, teams and events compete for global eyeballs.

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