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By Joe Devine Could watching live football in pubs soon be a thing of the past? The recent Premier League season was the first in the latest three-year broadcasting deal.
Many supporters have also welcomed the increases. Their clubs have larger sums to spend on players, and the beginning of a levelling-off effect is being seen within the league, as the significant rise in broadcasting income helps smaller teams to attract a broader range of talent. As usual, where there is commercial progress there is a cost to bear; that cost tends to eventually find the consumer.
Yet, there is another avenue of sales which has seen more significant increases in recent years, namely licensing sales to commercial properties.
In order to obtain the right to show live football in a commercial venue, such as a pub, the cost is much greater. This means that the cost of showing the Premier League in a large venue in Central London will be theoretically significantly greater than a small, rural pub.
The Old Red Lion calculates that to break even, they must sell 88 pints per game. This could happen several times a year during the bigger clashes, but a standard Saturday lunchtime game is very unlikely to accrue this level of sales.
Additionally, pubs with ties to a pub company such as Punch Taverns are obliged to buy their beer through that company, often at a much higher cost than the market value, shrinking the net profit on a pint and further squeezing the landlord. Perhaps the most ignominious aspect of the recent price hikes came in , when BT first entered the scene.
For certain pubs, these cost increases are totally unsustainable. Chris describes the viewing area in his one standard-screen pub as having a maximum capacity of 30 people. Yet, due to the pub being in an affluent area, the rateable value of his property is high, hence the unfairly high fees.
They pay the same rates. The landlord, Mark Fiddler, said that he cancelled his contracts at the end of last season in the hopes of renegotiating a better deal. Of course, Sky would profess that they would not encourage any pub unable to afford the cost to take the package, but their various optional discounts suggest something slightly different.
Selling food, creating an outdoor sports area, and operating a pub in a less densely populated area can qualify businesses for a discount on their package, but the biggest discount comes in the form of a partnered distributor. If the cost of football to pubs can be unsustainable, then the cost to Sky and BT of rapidly inflating broadcasting deals could quickly follow suit.
Similarly, in the United States, ESPN recorded their largest ever subscriber loss in October , with over , customers cancelling their subscriptions. Were Sky to lose the rights to the Premier League, a sizeable drop in customers might be expected. Data shows that in Hong Kong last year, when Premier League rights shifted from one broadcaster to another, customers tended to follow the football, and the share prices of the broadcaster that lost the rights plummeted.
In fear of a similar fate, Sky could continue to bid, pushing the increasing costs onto the consumer, and in particular, pubs.
The Premier League is shown in territories, in million homes, with a potential audience of 4.
Your local pub might be struggling with the cost of all that. This article first appeared on Football Could watching live football in pubs soon be a thing of the past?