The sports industry's lucrative business model is being undermined by dodgy TV sticks and illegal streaming links, writes Theo Leggett. Image source, Getty Images By International Business Correspondent "Football's Gone Round the Spend!" screamed The People newspaper one Sunday in July 1995. It reported breathlessly that three clubs between them were set to pay out more than £20m on new players.
The highlight that summer was the transfer of Stan Collymore from Nottingham Forest to Liverpool for a British record fee of £8.5m. That number might not seem too impressive today, in an age when £100m transfers are almost commonplace. But at the time it was seismic stuff, and it symbolised the conversion of football from sport into big business.
All of this had been made possible in the early 1990s by the creation of the Premier League, and its initial TV deal with the broadcaster Sky, which paid more than £300m for five years of rights. The agreement put live top-tier football behind a TV paywall for the first time. It was a lucrative model, one that other leading championships in motorsport, rugby, golf and cricket would later seek to replicate.
But now, that model is coming under pressure. Piracy has become endemic in British sports: around half of sports fans now admit to using what they might euphemistically call "alternative" means to watch paywalled material, according to the consultancy Ampere Analysis. Image source, Rico Brouwer/Soccrates/Getty Images Image caption, This year's Champions League final - won by Paris Saint-Germain - sparked an argument about TV viewing rights And this summer saw signs of a clampdown.
In August, a man in Lancashire was jailed for six and a half years for running an illegal streaming service that police said had generated almost £1m in illicit profits. In June, a postman from Pembrokeshire was jailed for over three years for selling illegal subscriptions and supplying pirate software to nearly 2,000 people. A third man, from Merseyside, received a suspended 32-month sentence in August for similar offences.
Several pubs have been fined thousands of pounds for screening matches illegally. TV companies that have paid huge sums for exclusive rights to high-profile sports are having to work harder than ever to protect their investments. To some extent, broadcasters used to see copyright theft as a cost of doing business: irritating and expensive, but not an existential threat.
But now, as advertising revenues fall, and viewers move away from long-term subscription services like Sky or TNT Sports, the industry is getting seriously worried. The end of TV sport's golden era? There is a great deal at stake. The Premier League alone is a sporting monster.
In its most recent deal, it sold its viewing rights to domestic audiences for £6.7bn over four years, with almost as much coming from foreign rights. Armed with bundles of TV cash, clubs have been able to attract the finest players in the world. That in turn has given the league a major international profile.
Although football has been the main beneficiary of paid-for TV in the UK, other competitions such as Formula One, Six Nations rugby and the Wimbledon tennis championships have also commanded very high fees for selling exclusive rights. Live sport on free-to-air television has become increasingly rare. Yet that wealth could be threatened by a surge in piracy and illegal viewing.
The practice is most common among younger, digital-native audiences, who each year become a larger and larger share of sports fans. But many older viewers also seem comfortable with it. Image source, Georges De Keerle/Getty Images)Image caption, Rupert Murdoch (left) launched Sky TV with the broadcaster Andrew Neil in 1989.
It went on to transform Britain's sports-watching landscape "For 18 to 34-year-olds, it's over 70% who admit to doing this regularly," says Daniel Monaghan, a researcher at Ampere Analysis. "Over half of 35 to 44s admit to doing it...".
Source: BBC Sport Football · Summarized by HeadlinesBriefing