Good value for money’s key in battle for eyeballs

PAUL REES LOOKS AT HOW TV COVERAGE HAS CHANGED OVER THE YEARS AND HOW IT HAS AFFECTED THE SUPPORTERS

A NUMBER of reports last week showed that consumers were reacting to the continuing economic uncertainty by changing their spending habits.

Families were going on the same length of holidays, but cutting back on clothes shopping and eating out to finance them.

Travellers were cutting back on insurance, some taking the gamble of going abroad without any cover while others were not declaring medical conditions to keep the premium down. More are buying alcohol to drink at home rather than pop down to the pub and so it goes on.

The message is clear that choices are being made when it comes to outlay, so it was perhaps not the most propitious week for the organisers of the Champions and Challenge Cups to announce that for the next three years its matches would be shown by a new provider, Premier Sports.

The previous contract had been with TNT, who earlier this year extended their deal with Premiership Rugby for a reduced price because the collapse of three clubs two seasons ago had reduced the number of matches played in the tournament.

Premiership Rugby, unlike European Professional Club Rugby, had nowhere else to go. TNT took over from BT who during the pandemic warned that the days of television rights for sport going up considerably every round of negotiations was over.

That does not include football whose popularity continues to grow despite the dominance in the Premier League of one team.

It dominates coverage on television, radio, print and social media, leaving little light for anything else.

TNT, who earlier this year took over the rights for the autumn internationals involving the Six Nations, took the view that club rugby had a limited television audience that meant extra investment would be uneconomic.

And so it was trumped by Premier Sports, which holds the rights to the United Rugby Championship and screens live Top 14 matches. Having acquired the Champions and Challenge Cups, it plans to establish a 24-hour rugby channel and “become the home of rugby in the UK and Ireland”.

The good news for its subscribers is that they will not have to pay any more for the eight rounds of the EPCR competitions but TNT subscribers in England will have to find an extra £10.99 a month if they find the Premiership is not enough of a rugby fix with more than 300 games on offer.

Union is now spread across four providers, all of which cost: Premier Sports, TNT, Sky, which has the rights to Super Rugby Pacific and Test matches in the southern hemisphere, and the BBC and ITV, home of the Six Nations with free-to-air television requiring a licence which is just shy of £170 annually.

“The priority overall was club finances,” said EPCR chief executive Jacques Raynaud, below. “Also the balance between viewership, a refresh for a younger audience and growing the game. The financial element and delivering money back to the clubs was at the heart of our tough negotiations.”

When the private equity company CVC started investing in rugby union, first in the Premiership, then the URC and the Six Nations, it was expected that competition among providers, with the likes of Amazon and (as was) Facebook jockeying with established operators like Sky and BT, would drive up the value of contracts and boost turnovers.

It has not worked out like that. Sky, which once harboured the same ambitions as Premier Sports now over its rugby coverage, has retreated to the margins, not seeing any merit in getting involved in bidding wars when the audience is small, even if perceived to be well heeled, Amazon has left the scene after some autumn Test screenings and TNT, which has done well for the Premiership, sees the greater returns to be made in Test rugby.

As do other forms of media. Club rugby used to be a big staple of the print media, but coverage has been pared down, in part because it attracts relatively few hits on the websites of newspapers, some of which have made their rugby correspondents redundant. Interest spikes in the Test windows.

Sky would doubtless become interested again if the live rights for the Six Nations became available. The unions want that option to be real to drive up the price, but the current contract with the BBC and ITV is expected to be renewed when it ends after next year's campaign.

Since Sky entered the sports market, the dilemma between income and exposure has tended to sway in the direction of the former. There will be little terrestrial element to the Champions Cup next season with S4C broadcasting a small number of matches, which next season will involve the Challenge Cup as none of Wales's four regions qualified for the Champions Cup, and RTE in Ireland having the rights to one.

“I accept that for an English rugby fan there will be a change in habits but I am hoping that we will convince hundreds of thousands to add this on,” said Raynaud. “It is very affordable and we have taken this into account.”

TNT had no interest in the Challenge Cup until its latter stages but Premier Sports will show it more affection, covering two games per round and all matches from the quarter-finals onwards having had the rights to the tournament for the last two seasons. It subscriber base is small compared to those of Sky and BT and Raynaud's aim of adding hundreds of thousands to it through two cup competitions will take some realising at a time of consumer retrenchment.

“We want to make a one-stop shop with our rugby channel,” said Premier Sports' chief executive Richard Sweeney. “And we would look at international rights in the future.” The station already has the rights to France and Italy's home autumn Tests.

By making the financial package top of its list of criteria, EPCR is taking a gamble because it could take a hit in other areas. With almost no terrestrial coverage before the final, viewing figures will be down. On what is not known because pay TV companies only reveal them if there is a surge, which does not happen often.

The number of viewers is likely to drop initially because England is the most populous of the four home unions by some way and how many of those there who subscribe to TNT primarily for the rugby will take out another subscription to watch a part-time tournament?

“The Champions Cup is seen as the jewel in European club rugby's tiara but with few likely winners”

So for sponsors like Investec, who have bought the naming rights for the Champions Cup, it means less exposure, unless Premier Sports can make up for the drop on social media. It is the dilemma for sports other than football, money or eyeballs, and it presumes that its new television partner will grow its audience. Where will viewers new to the sport come from?

Premier Sports rose from the ashes of Setanta Sports, whose British arm was put into administration in 2009 after it hoovered up sporting rights over a three-year period and then collapsed when it found itself unable to fulfil them; several football clubs in England and Scotland found themselves in financial difficulties having budgeted for income that did not materialise.

Setanta overstretched itself and when it collapsed had outstanding bank loans of £261m and unsecured debt totalling £288m. There had been customer service issues, not least the difficulty in cancelling subscriptions, and the company was not the only one that wilted in the heat generated by Sky.

Setanta was founded by Michael O'Rourke who in 2009 launched Premier Sports and picked up tournaments that had not been wanted by rival broadcasters after the collapse of Setanta. It was acquired by Viaplay in 2022 but bought back a year later.

“We will be driving significant investment into raising the profile of EPCR's competitions to new and existing audiences,” said O'Rourke after last week's announcement. “We will now provide the most comprehensive rugby club coverage available across the UK and Ireland with 80 European rugby fixtures, 151 URC games across five rugby nations and 110 Top 14 games live.”

He said it showed Premier Sports' ambition and growth. He did not have to mention that the rights for rugby matches are considerably cheaper than those for football. It was competing with Sky that did for Setanta, but whereas Sky saw the political capital to be gained in selling highlights rights to terrestrial television for a reasonable sum, Setanta set a high price and suffered.

And a worry with the EPCR deal is the lack of terrestrial exposure at a time when the club game needs to be seen. The question is where will be realised with old habits not being passed on.

Who gets their news from print these days, or even radio and television? There may have been a change of government this summer, but the BBC's licence fee model remains under threat because the average age of its audience is growing as the 16-30 group tends to do its watching on devices rather than sets.

It was where CVC was seen as being able to make a difference, but the pandemic ended the days on a significant uplift when rights came up for tender. The expected competition has not realised and, ultimately, Premier Sports will screen Champions Cup matches because TNT was not prepared to pay more.

The Champions Cup is seen as the jewel in European club rugby's tiara, but the modified format of 24 teams and a four-match group format had diluted its strength. The collapse of three Premiership clubs means 80 per cent of England's top flight qualify for the tournament, making it hardly champion.

It does not have many likely winners. The last four finals have been contested by three teams, Toulouse, La Rochelle and Leinster, and six sides have lifted the trophy in the last 16 years. For many, qualifying matters more than taking part because of the extra finance it generates.

There was not often more than one compelling game per round in the group stage and three of the four quarter-finals saw the home side win handsomely, although the exception was probably the match of the tournament between Bordeaux-Begles and Harlequins.

Lyon went to the Bulls in the round of last 16 with a weakened side and the South African franchise did the same a week later for the quarter-final against Northampton at Franklin's Gardens: both conceded 59 points in defeat, not a great look for a tournament that presents itself as the best.

The presence of South African sides has driven up travelling costs and raised logistical issues if a team travelling to and from there has a league match the following Friday. With Premier Sports having the rights for the URC and screening Top 24 games, it is in its interests to factor in travel when it decides the timing of matches.

Raynaud said that EPCR was working with Premier Sports to “ensure new fixture times for English clubs, avoiding clashes with Premier League football to maximise viewing.” Does that mean there will be no Premiership involvement in the 5.30pm kick-offs on Sunday that will be introduced as the live football starts an hour before?

Or 2pm on a Sunday, or 5.30pm on a Saturday evening? Even Friday night matches are not safe, leaving Saturday afternoons. There is no way that clashes with the Premier League can be avoided: minimising them will be difficult enough, but is being able to watch both the football and the rugby be the determining factor for most Premiership followers when it comes to considering a Premier Sports subscription?

The best value would be signing up for the round of 16 stage and cancelling after a month which, involving a 30-day period, would take in the final. The cost would be a couple of pence under £22, as it would for the two months it takes to complete the group stage. “We will be offering annual and monthly subscription offers to support all rugby fans,” said O'Rourke.

The success or not of the deal will not hinge on viewers or subscriptions, but the tournament itself, which should be made up of eight fewer teams and be competitive from the start, and the incursions it makes into social media. Television transformed football. Sky's first contract with the Premier League in 1992 was worth £304m, compared to the £44m ITV had paid for the previous four years. Sky saw football as driving subscriptions and four years later got England ejected from the then Five Nations for agreeing a deal that saw Sky awarded the rights for championship matches at Twickenham, games that were not the Rugby Football Union's to hawk.

It had to back down, but its deal with Sky included a fixed sum that had to be handed over to the clubs. The effect was to value club rugby at one quarter of the international game, which is why TNT are better off with the autumn internationals than the Champions Cup. If football sold satellite dishes for Sky, rugby was more a way of filling air time. It is different for Premier Sports and there is more realism around than there was in the heady times after the game went open and a gold rush followed.

Prospectors came and went and what Sky appreciated in 1996 is now widely recognised: internationals are the game's revenue driver, although the long established Top 14 in France does well for itself. It subsidises club rugby and the once mutinous Premiership clubs are focused on making their league worth watching and backing, aware that they have to sell themselves to discriminating spenders.

And so it is with EPCR, but many of its members put their leagues first: bread today, jam tomorrow.