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Action Replay: Sky and the Market for Sports Coverage

IN JULY Sky re-aligned its sports channels, dropping the numbered services in favour of separate channels devoted to their core sports ‘properties’, including cricket, Formula One, golf, and two football channels (with one specifically dedicated to the Premier League), and three channels dedicated to general sports coverage.

The change reflects Sky’s concern at the threat to its dominant position in the UK broadcasting market from viewers watching of sport via the internet both legally and illegally. Roughly 10 percent of live sports viewers use illegal streams.

With each passing year viewers become more adept at circumventing legal ways of watching live sport. This is why the Premier League has stepped up attempts to combat pirate viewing streams which deprive Sky of viewers and revenue.

Sky’s rebranding can also be seen as an attempt to protect its position against upstart rivals offering sports content at a cheaper price. In Germany DAZN, which broadcasts sport on demand via the internet for only £9.99 a month, has been rapidly collecting rights to broadcast sport since its launch last year and is already posing a challenge to Sky.

Other threats are other looming to traditional broadcasters. Amazon, Facebook, Twitter and YouTube have already begun live streaming sports in the US, and will soon try and show marquee sports events to a UK audience.

There is also the risk of sports leagues streaming their content directly to the fans, as Major League Baseball and the National Football League do in the US. If this happens over the next decade or so, the foundations on which Sky has built its commercial empire will become more than a little shaky.

For sports themselves, the future is just as uncertain. Games are competing against each other more ferociously than ever before, and some sports may realise they are not as popular and worth less then they imagined. But surely competition and business rivalries are the very ingredients that constitute capitalism?

If the sports economy is seen as a large cake Sky Sports is used to enjoying the largest slice. With every potential rival that enters the lucrative Sports TV arena (streaming or otherwise) the risk to Sky’s market share increases, their share of the cake may diminish and create unhappy shareholders. This is a mirror image of the inherent ruthlessness of capitalism.

KEVIN