Paul Rouse: Six Nations must be careful what it wishes for - Pay-per-view carries hefty price
A TV camera records the Ireland team during the national anthem ahead of a 2008 Six Nations game against Italy at Croke Park. Picture: Brendan Moran
For a year and more, the story that CVC Capital Partners – a private equity firm – planned to buy a substantial share in the Six Nations has been widely circulating.
CVC have already bought a 27% stake in Premiership Rugby and a 28% stake in the PRO14 tournament; they are now about to take 14.5% of the commercial rights for the Six Nations.
The statement issued last weekend by the President of French Rugby, Bernard Laporte, made plain that a final agreement is imminent: “The world of sport is severely affected by the health crisis. Sports federations around the world are losing part of their revenue. It is our responsibility to find solutions and provide a future for French and European rugby.
“Despite this very difficult environment, investment companies like CVC have identified rugby as a strong, solid and up-and-coming asset. Our sport, through the emotions it generates, the pleasure it gives and the values it embodies, seduces and arouses interest.
“If this partnership project were successful, CVC would thus become the 7th partner of the Six Nations, to help the Federations to develop their economic potential over time. At the same time, the Federations would retain their exclusive power to regulate sports practice and organize competitions.”
The distance that rugby has travelled since its professionalisation just 25 years ago is laid bare in the language of that statement. A private equity firm are to be the “7th partner of the Six Nations” and rugby is an “asset”!
It is the type of language that suggests there is change coming now to the commerce of rugby that promises to dramatically change the sport.
The immediate question has to be: What impact will this have on the ordinary people interested in the game?
The essential point of the investment is to take a minority stake in a sport in order to shape commercial decisions that will allow them make a return on their money.
The only way that this can happen is by selling product to those who are interested in the game.
This will play out in the long-term in different ways, but one seemingly inevitable short-term consequence will be the sale of the exclusive rights to broadcast Six Nations matches to Pay TV companies. This has already been widely speculated on.
And the context of a likely rugby-Pay TV deal is the perceived need for rugby administrators (and their expected new commercial partner) to maximise the earning potential of the most attractive competition that it has for sale.
This follows the logic of professional sport.
But not entirely, of course. The attraction of immediate cash must be balanced against the long term profile of the sport. Striking that balance is no straightforward manner.
How do you make sure your sport reaches beyond its devotees and that it is placed in an easily-accessible window?
There is another frame to this decision. This frame is the legislative actions of the Irish state – and the limitations of those actions.
For example, a process that began in April 2010 has a direct impact on what will transpire in the sale of TV rights in the coming months.
Back in 2010, the then Minister for Communications and now leader of the Green Party, Éamon Ryan, proposed changes to the list of sporting events designated as protected for broadcast on free-to-air television in Ireland.
EU Member States can designate sporting and cultural events as being of major importance to society. Such events must be made available on free-to-air television. The government then reviews the list of designated events every three years.
The initial Irish list had been created in 2003 after the furore over the sale of the rights to broadcast Irish soccer international games to Sky Sports.
A political and public storm of disapproval led to a change in the law and, using a 1997 amendment to the EU’s Television Without Frontiers directive, the Irish government created a list of sporting events which could now only be shown on free-to-air television.
Placed on the list were the Summer Olympics; the All-Ireland senior football and hurling finals; the Republic of Ireland’s World Cup and European qualifying games and Finals’ games; the opening games, semi-finals and final of the World Cup and European Championship finals; Ireland’s matches in the Rugby World Cup finals; the Irish Grand National; the Irish Derby; and the Nations Cup at the Dublin Horse Show.
Surprisingly, the Six Nations rugby championship was not placed on the list.
It was, however, put on a B List – meaning coverage must be provided on a deferred basis, at least, on terrestrial TV.
It is not clear why this was the case – and it would be most interesting to get a full understanding of the process and the thinking that led to this choice.
Either way, the contrast in the manner in which rugby was treated in comparison with soccer is obvious and wrong.
Then Ryan announced in 2010 that he was proposing to add a number of new events to the free-to-air list. These additions included the Six Nations rugby championship, as well as Heineken Cup matches involving Irish provincial teams, the GAA provincial finals, and the All-Ireland quarter- and semi-finals in football and hurling.
Also proposed for addition was the Cheltenham horse-racing festival.
Determined to retain absolute control over the sale of their rights to whomsoever they chose, the Irish Rugby Football Union – supported by the provincial rugby bodies – launched an impressive counter-attack.
Further support came from rugby journalists and from politicians from opposition parties. Simon Coveney, then the Fine Gael Communications spokesperson, proclaimed that “Ryan’s interference threatens to destroy the golden era of Irish rugby.”
Back then, Coveney blamed the Government for allowing a pay-to-view channel to buy the rights to Irish soccer internationals, saying it was a failure that had let down the ordinary Irish fan: “The decision is a blatant commercial decision by the FAI and a selfish one which will result in a lot of people having to pay for the enjoyment of seeing the Irish team play at home.” And yet no-one was more outspoken in his criticism of Éamon Ryan’s proposal than Simon Coveney.
Ultimately, Ryan’s proposal fell with the government of which he was part and was never revived.
The thing is that Ryan’s endeavour was rooted in a clear understanding that the minute you put rugby behind a paywall, you change its audience.
The prime example in Ireland is the move of Heineken European Cup Rugby from RTÉ́ to Sky Sports.
Television ratings show clearly that many fewer people watched Heineken Cup Rugby when it was shown exclusively in Ireland on Sky in 2006-2007 than when it was free-to-air on RTÉ́ in 2005-2006.
A direct comparison can be made between the quarter-finals of the competition in successive years, played in the aftermath of successful international rugby seasons which saw Ireland win the Triple Crown and enjoy unprecedented media profile.
On Saturday, March 31, 2007 Leinster played an away Heineken Cup quarter-final against London Wasps. The game was shown live on Sky Sports 1. The previous year at the quarter-final stage Leinster had played away at Toulouse, again on a Saturday afternoon, 1 April 2006. This game was shown free-to-air on RTÉ́.
- 255,000 people watched the 2006 match on RTÉ́, 47,000 watched on Sky in 2007.
- The number of children under 14 watching the Leinster quarter-final match dipped from 27,000 on RTÉ́ in 2006 to 2,000 on Sky in 2007.
- The number of women who watched the 2006 match on RTÉ́ was 67,000 and on Sky in 2007 the number was 9,000.
- The number of people in rural areas who watched the 2006 match on RTÉ́ was 111,000, while the number who watched the Sky match in 2007 was 9,000.
- The decline in people watching the quarter-final was particularly pronounced in Connacht-Ulster where the number of viewers fell from 45,000 for the 2006 RTÉ́ broadcast to 3,000 for the Sky match in 2007.
- The number of farmers who watched the matches fell from 19,000 on RTÉ́ in 2006 to just 1,000 on Sky in 2007.
- The number of people over 55 who watched the match fell from 98,000 on RTÉ́ in 2006 to 14,000 on Sky in 2007.
- The overall share of all viewers watching television at that time fell from 33.2% on RTÉ́ in 2006 to 5.5% on Sky in 2007.
The bottom line is that putting rugby behind a paywall dramatically shrinks the audience.
This is precisely what will happen when the Six Nations go behind a pay-wall.
There is an argument to be had for a professional sports organisation as to whether the shrinking of the audience is be worth it for the increased income.
The challenge for rugby administrators is to assess whether they are significantly damaging the long term prospects of the game by cutting off the casual supporter (especially those who are children and potential recruits to the sport).
In an echo of the her party leader’s last time in government, the Green Party TD and deputy leader Catherine Martin – who is Minister for Sport, as part of her ministerial brief – has just completed a public consultation process to determine the public’s views on which sporting events should be made available on a free-to-air basis.
It will be fascinating to see if the Six Nations are added to the list of protected events, before they are ultimately sold by the people who run rugby to a Pay-TV company.
