OPINION: Sports Media Rights Model Must Change

13 Jul 2020

Lee Choong Khay, Head of Sport at Malaysian pay-TV broadcaster Astro, implores rights-holders and broadcasters to take the opportunity of the COVID-19 interruption to reconsider the sports media rights model.

Sports fans around the globe have waited a long time to watch live sports again. During the live sports hiatus, broadcasters had to feed hungry sports fans as best they could. We were, and are, adapting to a ‘new normal’, just like everyone else in the sports ecosystem – rights-holders, federations, advertisers, teams, players and fans.

The pandemic sent the entire ecosystem into shock. As revenues decline, stakeholders are re-evaluating the commercial value of sports properties. The stakes are massive in the case of sports events affected by cancellation or suspension. The ripple effects include lower ticket sales, renegotiation of sponsorships and media rights deals, and management shake-ups at sports federations and associations. KPMG estimated that, if Europe’s big five football leagues had been unable to complete their 2019-20 seasons, revenue losses may have exceeded €4bn (R75bn).

Broadcasters know that, ultimately, it is the customers who pay to watch live sports. Hence, when live sports came to a halt, they had to offer complementary non-sports content and other options such as subscription-fee suspensions and rebates, or a combination of these measures, to retain customers. Most pay-television broadcasters work on a monthly subscription model and their customers expect continuous live sporting events. We can’t expect customers to keep paying without getting live sports for months.

At Astro, we have provided rebates to our customers during this period while we negotiate for relief from rights-holders. While this situation was not ideal financially, we believe it was the right thing to do.

Bear in mind that broadcast platforms still face other serious, ongoing challenges like fighting piracy.

We hope that rights-holders will step up during this crisis and not only pay lip service to the plight of broadcast platforms. We now see federations and associations frantically trying to fill up the remaining calendar with all their events to fulfill sponsor and broadcast commitments. Will these events still be the same or as meaningful? Has the product changed? Will the fans accept the changes? These are questions affecting all stakeholders in the sports ecosystem which cannot be answered in the short term.

The pandemic has made more urgent the need to change the existing broadcast rights model that emphasises extracting the highest rights fees possible from buyers. The right model for the ‘new normal’ we are facing after COVID-19 should be more inclusive, with broadcasters and rights-holders taking risks and trying to grow together. Broadcast platforms like Astro have much to offer rights-holders through marketing, promotion, production and sponsorships, towards the shared goal of monetising sports.

Simply put, everyone in the sports ecosystem must be a team player. We win or lose as a team, with the same goal of bringing sports back and making the industry more resilient and sustainable. With that in mind, we can move forward together.

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