Wednesday, January 20, 2010

Escalating Costs of Broadcasting FIFA World Cup 2010

Are football fans willing to pay through their noses for a dose of their favourite programme on television? According to news reports, SingTel and StarHub have indicated that the cost for the rights to broadcast the 2010 FIFA World Cup has escalated significantly and are still in negotiations with FIFA on a more platable pricing for the broadcast rights.

Interesting, the bid submitted to FIFA is a joint effort by Singtel and Starhub that provides FIFA with an increase in value for the rights from that negotiated for the previous World Cup 2006.

In negotiating a deal, because of FIFA's confidentiality provisions, the telcos have said they are unable to disclose much details other than that "in an attempt to reach a value that is acceptable to FIFA to bring World Cup to Singapore, the price offered to FIFA would sacrifice all World Cup margins for both SingTel and StarHub while keeping the price affordable for consumers."

What is the scale of FIFA's demands? One scenario that had surfaced is that potential subscribers would have to pay nearly three times what they forked out for the 2006 World Cup package, translating to to about $150 to see every match to be played in South Africa. Is anyone going to be willing to pay such prices to catch a game of soccer? The ordinary man in the streets will most likely not do so since there are so many alternatives available these days.

How about settling for the free-to-air telecasts of key World Cup matches (usually the opening match, the two semi-finals and the final)? It now appears that the telecast of these matches are actually dependent on whether the telcos secure the broadcasting rights... meaning that if the negotiations do not succeed, football fans will have to pass up these matches too!

How did such a situation come about? Objectively, it is a matter of the fans' own doing. A bidding war between SingTel and Starhub for the broadcast rights of the English Premier League (EPL) last year made the headlines wordwide and likely cemented FIFA's perception of the ability of the local telcos to pay premium prices for the rights to FIFA World Cup 2010. Not to mention that increasingly, we get news of higher and higher transfer fees and such and also players being paid obscenely high weekly wages that are above the typical annual wages of Singaporeans.

Some quarters are suggesting that companies like Singapore Pools or Tiger Beer chip in sponsorship to help defray the costs but why should Singaporeans be held ransom to pay exorbitant prices for a dose of sports? Any amount that is paid to FIFA is money that could have been spent on the local economy. This game of brinksmanship is decided by who decides to blink first. If FIFA manages to secure their asking price, Singaporeans can be assured of paying increasingly astronomical pricing for future FIFA content. If Singtel-Starhub pays FIFA's asking price, profits may be eroded significantly and resources to secure quality programmes outside of the football season will be limited.
It may be blasphemy to suggest that football fans should look for alternatives to their favourite sports but there are tonnes of other options that excite spectators equally well. NBA basketball, cricket, tennis, golf, volleyball... The list is long.

Fans must not be held ransom to support their favourite sports. The essence of sports is sportsmanship, "an aspiration or ethos that the activity will be enjoyed for its own sake, with proper consideration for fairness, ethics, respect, and a sense of fellowship"

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