Sky holds all the aces in TV rights' negotiations

THE main sports organisations in Ireland are convinced the Government will have to pay compensation in line with the market value of their games if they are to succeed in securing live coverage for terrestrial TV channels.

In the case of international football the market value has been set by Sky who have agreed to pay the FAI 7.5m for exclusive rights to Ireland’s matches for four years.

The probability is that before too long Sky will also effectively establish the market value of the top matches in GAA competitions and Ireland’s international rugby matches. With three designated sports channels Sky’s appetite for live coverage of top events is voracious and, like it or not, they are prepared to pay top dollar for exclusive rights.

The sports’ bodies yesterday viewed the Government’s decision to specify what sports fixtures they wanted retained for terrestrial TV with something of a jaundiced eye. The legislation that empowers them to do this was enacted in 1999 but it needed a deal between Sky and the FAI to kick-start them into making a list of the events they wanted protected for free-to-air transmission.

The Government’s response does not guarantee that the matches will be shown on terrestrial channels. It is certain Sky will challenge their right to interfere in a commercial arrangement freely entered into by both parties.

Sky and the FAI believe the contract is legally binding, even if a spokesman for Sky Ireland yesterday offered a ‘no comment’ response to my queries.

The FAI’s stand on the issue is, in a sense, a test case for all sports organisations, the GAA and the IRFU included. They also are keenly aware of the commercial value of live coverage of their games and, just like the FAI, cannot afford to ignore this potentially lucrative source of income.

In this context it is interesting to recall the report of the director general of the GAA, Liam Mulvihill, to the annual congress in Dublin in April ever before the Government drew up any list of ‘protected’ events. In his written report, Mulvihill made the following points:

*The list system discriminates very severely against a mainly domestic organisation.

*In at least two countries which have a list system, the terrestrial broadcasters are seeking the discontinuation of the system on the basis that they are expected to pay too much money to provide the games for their audience.

*If the lists of protected events were drawn up there would be an onus on the State to see that the Irish sporting organisations were paid a fair price for their product.

The financial pressures on all three sports organisations continue to grow so they have to be conscious of maximising their incomes.

In this context, it is only fair to quote one other point made by Mr Mulvihill, for he reported:

*The GAA has never proposed that its games be tied into a non-terrestrial broadcaster.

The question is how will the GAA react when, as seems inevitable, Sky knocks on their door with a proposal to purchase rights to live coverage of the All-Ireland series.

Any fair-minded person must be in favour of the games being shown live on terrestrial channels. If the sports organisations are to fulfil their obligation to propagate their games they will want to reach the bigger audiences on terrestrial TV as well. But the harsh truth is that the sports need the income from TV rights to survive and expand.

FAI treasurer John Delaney illustrated that point when he pointed out that Ireland’s World Cup qualifying tie against Holland at Lansdowne Road drew a capacity attendance of 35,000 people.

The admission fees amounted to a considerable sum but the income the FAI received from Dutch TV companies for the right to broadcast the match live in Holland yielded “three times as much money”.

Some politicians have suggested that the grants of 15m which the Government will pay to the FAI over the next three years for backing the proposed Stadium Ireland should be made conditional on the FAI making their games available ‘free to air’.

These grants are for structural and capital developments only, however, they will not appear in the FAI balance sheet. The FAI needs the TV income to meet the running costs of the organisation.

Last season Ireland’s representative teams played 102 international matches home and away in addition to the matches played by the senior team. The managers of those international teams, including the ladies’ teams, were unable to play in all the available competitions because of the costs involved.

The bottom line is that the FAI needs Sky. And if the Government is to succeed in its stated aim it will have to do business with Sky as well. As matters stand, it is Sky, and not the FAI, which owns the rights.