Does football need Sky more than Sky needs football? It's almost impossible to imagine the one without the other these days. Sky and football, particularly Premier League football, has been the TV market's dominant theme for a decade now. The beautiful game has been the main driver of the UK's move to multichannel TV and into the digital age. And this has been a two-way street - Sky has helped haul football out of the dark days of the 80s (ugly violence, decaying stadiums, the dark shadow of the Hillsborough disaster) and into the 21st century.
But Sky has no divine right to the Premiership contract - as we may be about to find out. Although the current Sky deal doesn't run out until the end of the 2003-4 season, manoeuvring is already underway, with the clubs and league management meeting to draw up a tender document.
Will Sky face a credible rival bid this time around? A few months ago, when everyone believed the bottom had dropped out of the football rights market, most observers would have considered it improbable. But (contrary to the experience in other European markets) the Premier League is probably going to hold its overall value at somewhere just under the level currently paid by Sky, which is £367 million a season for a total of 66 live games.
The equivalent figure this time around is expected to be £300 million, all things being equal.
But all things might not be equal: the European Union's Competition Commission would like to see the rights carved up in such a way as to give more than one broadcaster access to live league games. Some commissioners argue that the Premier League may be acting as a cartel in holding collective negotiations for all games and would like to see individual clubs given the option of selling their rights on an individual basis. That ultimate meltdown is unlikely to happen - but the league may feel it wise to break the rights up into a number of packages.
Sky declined to comment, but would the breakup of its rights package be good for the TV market, for advertisers and, indeed for the game itself?
Gary Knight, the executive commercial director of Granada Media, is in an interesting position. Granada is a shareholder of both Arsenal and Liverpool and advises the clubs on media issues. Knight says that if the rights are broken up, it will then be fascinating to see how the packages are constructed. "A package of run-of-the-mill games will not attract very high bids. If you evaluate the attractiveness of games on the basis of category A, B and C, you'd have to have five category-A games in a package of ten. A package that didn't include any of the important games of Manchester United, Liverpool or Arsenal would not be of much interest."
But he does argue that it could be good news for everyone if commercial terrestrial TV gets at least some of the action. "Multi-channel is still growing and it has been delivering good audiences for football, such as the recent Arsenal/ Manchester United game, but terrestrial will deliver substantially more. Anything that allows the clubs to market themselves more widely has to be good," he says.
Ben Wells, a football consultant at the sports marketing agency Redmandarin, agrees with much of that, but he reckons the status quo isn't as threatened as some people have been suggesting. He argues that it wouldn't actually be a disaster for Sky if they lost some games and terrestrial might be a good shop window for the game as a whole.
On the other hand, ITV might see it as a risky proposition, given its experience with ITV Sport and its failure to maximise returns on the Premiership highlights rights that it has. When it comes down to it, Sky's business model is just so much more robust.
And as for the EU, it could soon realise the error of its ways. He states: "The EU will eventually realise that football is a special case. The (TV rights) bubble has burst but only to the extent that broadcasters are now only interested in the top clubs. TV companies are separating out what they call the icon properties and there's a growing disparity between the icon stuff and the rest."
So, if the EU really wants to increase competition, the last thing it should do is ensure that a handful of clubs get all the TV money. The icon properties are attractive only when they exist in a context of meaningful competition - and you only have to look north of the border to see what a disaster it is when resource is polarised. The Scottish Premier League is a joke, with two clubs taking it in turns to "win" the title. Consequently, the Scottish game faces a bleak future. The English game is already in danger of following suit - only three clubs have won the top league in the past decade.
So perhaps the status quo will actually please everybody - including advertisers. After all, the people who are genuinely interested in football already have multichannel TV and the football fans who aren't signed up are the ones who would if they could but just can't afford it. In other words, to be brutally frank, that part of the audience isn't of much interest to advertisers, is it?
Not true, Howard Nead, the managing director of PHDiQ says. "They may not be buying BMWs but they're certainly buying all sorts of other things," he states. "We would like access to the biggest audiences possible and the mixture of satellite and terrestrial is an interesting one for advertisers because while terrestrial delivers the numbers, Sky delivers interesting demographics for many advertisers. For instance, next season Sky has some Champions League and it might be the case that Sky delivers two million on the Tuesday and ITV delivers eight million on the Wednesday. Overall, most advertisers would see that as a good combination and would welcome the prospect of a similar combination where the Premiership is concerned."
John Blakemore, the UK ad director of GlaxoSmithKline, reveals that he's a big fan of Sky and appreciates what it has done for the game and its coverage on TV over the past decade. But he tends to agree with Nead: "If Sky lost any of the football rights it would be less of a problem for them than it might have been three or four years ago. They've already got all the subscribers they're going to get on the basis of football.
Now that they have multichannel, those people wouldn't get rid of Sky if it carried less football. So from a pretty selfish point of view, we wouldn't mind there being some live games on ITV because it might help grow commercial impacts and that would be good for us and our brands such as Lucozade Sport. What we would not like to see would be the BBC coming in. We obviously want to have more commercial access, not less," he says.