The credit crunch is looking like it could quickly start to make a difference to the football we watch on television, never mind the football we watch from the terraces as clubs continue to look to cut their costs in the face of decreasing crowds and commercial revenue. The news recently coming through that both ITV and Setanta are looking to restructure their payments on their current deals with the Football Association. Looking back, ITV don't seem to have learned from the total collapse of their sister company ITV Digital in 2002. That deal then costing the Football League a big whack of money as they were eventually only awarded £4 by Judge Rimer at the High Court in stark comparison to the £150 million they had been seeking after suing their own legal advisers. This time around ITV, in March 2007, agreeing a staggering £275 million deal to show all of England's competitive games at Wembley and take first pick of live FA Cup matches. The contract also involving Setanta who paid £150 million for some of England's friendly internationals and 17 live FA Cup games each season. The two broadcasters agreeing to show one semi-final each as well as them both televising the final. The total deal of £425 million over four years being a hearty 42% increase on the previous contract of the same length with the BBC. Paying that much might have seemed a good idea at the time by ITV and Setanta as they looked to take viewers away from the BBC and SKY respectively but in the present economic climate you can understand why they are both now starting to twitch about their repayments. Setanta are the ones looking more nervously at their balance sheet though as they rely solely on subscribers, those monthly direct debit payments often being the first thing to go when punters start to tighten their belt as the recession deepens. The fact that they have lost 23 live Premier League matches per season to rivals SKY from 2010 onwards not exactly helping their efforts to get more subscribers on board. The Dublin-based company does currently have 1.5 million of those digital punters but a look at its most recent accounts sees a less rosy outlook, as they show a loss of £114.9 million in 2007 with the net debt standing at £164.6 million at the end of December 2007. The hiring of London-based merchant bank Chase Brothers recently being one way Setanta is looking to raise the cash to pay for its three year deal to show 23 Premier League on Saturday evenings from 2010. One area where SKY and Setanta suffer too compared to the BBC and ITV is the numerous places people stream live football for free these days on the internet with the continuing advent of modern technology. The Premier League currently pressuring culture secretary Andy Burnham and business secretary Lord Mandelson to help them in their quest to stop free online broadcasts. YouTube and Justin.tv have both been threatened with action by the Premier League, YouTube being a case that will be heard in the United States this year. A crackdown taking place over the pond as well, Major League Baseball in particular at the heart of it as they currently employ three people to monitor illegal broadcasts, last year seeing 5,000 separate incidents recorded. An unsurprising total given that each franchise plays a mammoth 162 games in a regular season. An English Premier League lawyer commenting to the Guardian: "The ISPs have got to take more responsibility. We have sent over 700 cease-and-desist letters and had an 87% success rate this season. One of our problems though is that often the sites reregister a domain name, using false names and addresses, and sign up with an ISP in a less protected country - 60% of peer-to-peer activity has been coming out of China. ISPs have to take on a stronger role and have a better enforcement policy." Understandably the Premier League is badgering the government to make internet service providers responsible for what their own subscribers do, chief executive Richard Scudamore wanting an IP Tsar put in place to help the current crackdown. The Premier League looking for the government to be much stronger in their outlook in the need for more consistent enforcement. So it looks like being an interesting few years ahead as far the watching of football away from the ground is concerned. A tight rope needed to be walked by Setanta and SKY in an effort to keep their subscribers but pay less for the content, thus risking someone else taking it off their hands. Like a lot of businesses at the moment though it looks a case of batten down the hatches and ride through the storm until the weather picks up. |