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Sport on Pay-to-View: It's Not as Bad as We Might Think

Going to Pay to View does not deny people the opportunity to watch altogether, but the money that it brings, if well spent, can provide thousands with new opportunities to get involved: in this respect, it seems that pay to view broadcasting can be the egalitarian way, after all.

Broadcasting rights are a hot topic: recently we've heard that the Six Nations will consider offers from Pay to View television operators for its next UK broadcast rights deal, we've learned that Sky will broadcast The Open Championships from 2017, and then of course there's the Sky/BT £5 billion mega-deal for the Premier League. With regards to the Six Nations and The Open, both these stories were greeted with an outcry: moving to Pay to View is regarded by many as selling out - chasing the big bucks at the expense of keeping the 'bigger picture' in sight. This bigger picture takes into account not just revenue, but the sport's popularity at grassroots level - and the associated health and social benefits of participation in sport. It is assumed that this correlates with TV viewing figures, but delve a little deeper and the evidence does not unequivocally suggest that in order to support this bigger picture, live sporting events must remain on terrestrial television.

An egalitarian argument is perhaps the strongest one in favour of as much live sport as possible remaining on terrestrial television. In an ideal world, everyone would be able to watch and enjoy live professional sport without paying large subscription fees. And it cannot be denied, unsurprisingly, that more people tune in to sport on terrestrial television than they do on Pay to View channels. For example, the average ratings for live test cricket on Channel 4 ranged between 1.05 and 1.32 million each year (2005 excepted), whilst the averages for the two home series shown on Sky in 2006 were 0.23 million and 0.29 million for the Sri Lanka and Pakistan series respectively.

It is an oft-held perception that moving to Pay to View damages a sport at grassroots level, but the link between less sport on terrestrial television and lower participation rates is far from conclusive. According to Sport England's latest Active People Survey, the 5 sports with the highest weekly participation figures among those 14 and over are swimming, athletics, football, cycling, and golf - in that order. Among 14-25 year olds, badminton makes it into the top 5 at the expense of golf. The Premier League is on pay to view TV, yet over 2 million over 14s play football every week. And we know that swimming and badminton hardly draw big TV audiences. In short, terrestrial television coverage is not a prerequisite to high participation rates.

But more importantly, what happens when a sport moves from terrestrial TV to Pay to View? To expand on the cricket example, participation rates since 2005 do not reflect a decline which coincides with the move from Channel 4 to Sky. There has been a statistically significant decline in the number of over 16s taking part in cricket on a regular basis since the first Active People Survey of October 2005-October 2006, but the fashion in which this has occurred suggests no correlation with the changing TV coverage. 2006 was the first season in which Sky had the exclusive rights, but cricket participation rates actually rose between 2007 and 2009, and peaked at 215,500 in October 2010- October 11 (compared to 195,200 in 2005-06). This does not illustrate what many feared: a sport in decline due to a lack of live terrestrial broadcasts.

This is not to argue that fewer viewers therefore doesn't matter, but clearly there is a trade-off to be made. The money that Pay to View providers can inject into a sport is not to be sniffed at, as illustrated by the new Premier League deal to the tune of £5.2 billion. Sky's 2012 contract with ECB for live international and domestic cricket was reportedly worth £280m over 4 years (compared to £103m over 6 years for Channel 4's previous deal). Of course, the seller wants to make money. But alongside this, it is possible to ensure that the benefits this cash injection can bring outweigh the downsides of limiting the TV audience.

The ECB justified the move to Sky citing the importance of the extra cash in sustaining the game: the shortfall that would have resulted from refusing Sky's offer would have meant that the elite English squad would have suffered budget cuts, while the professional county cricket game would also have been placed in a more difficult financial position than was already the case. Cricket in England is a prime example of sport where revenue generated by the international team is vital to support even the second tier of the sport; to pass up on the opportunity to strengthen the sport's precarious financial position would have been a foolish decision. And so, looking at the 'bigger picture' may well suggest that what some see as 'selling out' can, in fact, be prudent choice in order to grow a sport. Far from a move to pay to view TV being a death-knell, the money generated can be reinvested in the sport to good effect. It is no coincidence that during the Sky era the ECB have invested heavily in both women's cricket and disability cricket. Furthermore, the ECB's launch of 'Chance to Shine', which has to date brought cricket to 2.5 million children in 11,000 state schools across England and Wales, coincided with the Sky contract: the funding is thanks to the revenue that Sky has brought. Of course, there is a caveat here: the body selling the rights must be prepared to spend the money on this development (as the ECB is doing, but the Premier League is not - most of its money is spent on players) - but nonetheless, should the seller of the rights have the inclination to invest at grassroots level, the potential benefit is huge.

Returning to The Open, we know that participation rates in golf have been declining for years (from 889,100 regular participants in October 2005 -October 2006 to 730,000 in October 2013 - October 2014). BBC coverage of the Open has not been enough to foster interest and reverse this trend, and so a different approach is needed. The Royal & Ancient Golf Club has generated an extra £30 million via the move from the BBC to Sky - an extra £30 million to invest in developing the sport.

Finally, it is worth noting that a move to Pay to View does not render these sports or events completely inaccessible: The Open, and indeed the 6 Nations, fall into Ofcom's 'Category B', which means that terrestrial television must retain sufficient secondary coverage, either in the form of highlights or delayed broadcasts. The huge number of viewers for Match of the Day each week, and indeed the good ratings for Channel 5's cricket highlights, illustrate that the reach of this secondary coverage can be wide. Thus, going to Pay to View does not deny people the opportunity to watch altogether, but the money that it brings, if well spent, can provide thousands with new opportunities to get involved: in this respect, it seems that pay to view broadcasting can be the egalitarian way, after all.

This blog first appeared on Sporting Speak:

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