Why Premier League Clubs May Want To Dismiss The Middle Men
Video killed the radio star. But, in fact, it didn’t. It only transformed the industry. Radio still lives. It’s just not that important anymore. However, record companies surfaced a worse fate. Napster brought music piracy to the mainstream, while later iTunes revolutionized the industry making albums less important and singles more consumable. At the same time, you’ve had artists such as Nine Inch Nails, The Cult and Radiohead selling albums directly to their fans without the need for a record company to get involved at all, allowing artists to take a larger cut of the profits.
So what does this have to do with soccer? Everything. In the above example of the record company industry, the middle man is getting cut out of the equation and while the record company industry may not die, it’ll be the independent ones that will continue by distributing music to fans who are loyal to boutique labels. In soccer, the clubs are the artists and the middle men are the television networks.
Take, for example, Manchester United. The club has its own television channel, MUTV. They have state-of-the-art equipment, proven experience putting together high quality productions. And a staff of qualified individuals many of whom have experience working with Sky Sports and other broadcasters.
At the same time, Manchester United has an enormous number of fans worldwide who eat, live and breathe United matches on a weekly basis. What if Manchester United was able to do a deal directly with supporters to show each and every home and away match, delivered to you via the Internet or a MUTV channel through your cable and satellite provider? For United supporters, as long as they can access the content, there wouldn’t be any negative. In fact, a MUTV broadcast of a live Manchester United match may be able to feature additional content either before or after matches, or during half time, that a typical broadcaster would not be interested in or would not have access to.
For Manchester United, the opportunity to amass a greater portion of the revenue from the TV rights to those home and away games would be enormous. In the beginning they may not be able to do a worldwide deal, but even if they were able to negotiate contracts in China, India, Malaysia or other countries, the benefits for Manchester United would be transforming.
So where does that leave companies such as Fox Soccer Channel, ESPN, Sky Sports and others? Of course, they’ll fight to keep control of their TV rights but you have to wonder what value they provide other than showing live matches (especially if you can watch the games directly from your favorite club). ESPN has plenty of other sports programming to fill its channels as well as access to pundits and breaking news in the United Kingdom. Fox Soccer Channel has its sister relationship with Sky Sports so it could continue to distribute Sky’s news on the American channel. But in reality, take the Premier League games away from ESPN and Fox Soccer Channel, and there isn’t much value left for soccer fans who eat, live and breathe Premier League football.
Now if you’re a Manchester United supporter, it’s all well and good to be able to purchase a package that would allow you to watch all the matches via the Internet and/or MUTV, but two challenges remain. The first is that not everyone is a Manchester United supporter. And there are many people, especially outside the United Kingdom, who are fans of the Premier League, not specifically one team (although they have one which is their favorite, it’s not the same as being only a die-hard Man United supporter who only watches United matches).
The second challenge is distribution. Soccer fans in the United States know how hard it is to get Fox Soccer Channel in HD and Fox Soccer Plus. On cable providers, the distribution of those channels has been woeful. Most cable customers in this country still can’t get either channel.
So if distribution woes continue to be a problem, and I don’t see them getting resolved anytime in the near future, then the key to success will be watching content streamed to your television set via a broadband device (either your computer hooked up to the TV via HDMI cables, a streaming device such as Roku or Boxee, or watching the games directly on your laptop). With this equation, all you would need is an ISP who will provide you with speedy access to the Internet, and payment to Manchester United via a per-game or per-season package. If clubs are smart, though, they’ll work together to offer a Premier League package which would offer all the games to watch online.
A lot has to happen first before any of this can materialize. There are a lot of battles to be staged. The Premier League will not want to give up its lucrative TV deals which is what has fueled the success of the league since 1992. In a sense, the Premier League itself would be fighting against its own clubs to maintain control of who collects the money. I don’t see the Premier League giving up their control unless the vast majority of Premier League chairmen wanted to do their direct deals with soccer fans worldwide.
All of this is unchartered territory, but I believe it’s the way that soccer is heading, specifically the Premier League. In the coming years, it’ll be interesting to see what developments occur overseas, especially in Asia, to see if clubs such as United try to do direct deals to bring their matches to consumers. That could be the launching pad for a paradigm shift, and an opportunity for football clubs to significantly increase their value by becoming global entertainment providers directly receiving revenue from soccer fans worldwide.