So Raith Rovers have come out and explained in a statement their concerns about Newco Rangers. The statement in the whole is well balanced and makes sense.
Its let down by one paragraph relating to the TV contracts.
They said…
It showed the impact of potential total loss of 3 TV contracts, all of which had been inexplicably agreed on the basis that the broadcaster could walk away if either Rangers or Celtic were not in the SPL. His information did not, however, set out the potentially positive impact of negotiating replacement contracts with other broadcasters or alternatively the much mentioned possibility of launching SPL TV (which we understand could have been launched within a matter of months).
Now first off the ‘potentially positive impact of negotiating replacement contracts with other broadcasters’ comment.
Ok are Raith Rovers suggesting that the SPL can get a better deal elsewhere?
The fact is, the only company in town are SKY who are offering £10m a season with four Old Firm games. ESPN have a secondary deal worth around £5m a season.
Now who is going to offer more?
BBC and STV didn’t even bid for the secondary deal, so they are basically saying they cant afford the £5m never mind £10m or above! That or they just are not interested in the product!
BT Vision are not in the market yet and have splashed out a fortune to get the secondary EPL live games in a years time. So they will bring out their own channel, that will take a year to come onto the market. They don’t need or want the SPL especially not in the short term.
People have suggested that in Denmark the Danes have a better TV deal for their football league, which isn’t as good or big in terms of brand as the SPL is. The figure banded about is €45m, well the Danish broadcasters only have one major league to look at. SKY and the rest have a UK market and look at the EPL first as its a major cash cow.
There is no competition for the SPL rights, for various reasons I may add, this means that SKY can come in and snap them up at the bottom price. Take out the Rangers fans and the Old Firm games and you takeaway a lot of their viewership and the highest rated games.
Now for SPL TV.
Months? Really Raith Rovers months?
Can you back this statement up?
Now for the past two years I have visited the IBC show in Amsterdam. IBC is Europe’s premier International Broadcasting Convention. This is a show where all the top companies sell their goods to broadcasters such as BBC, SKY and ESPN.
I work in production and know what will be needed to start up an SPL TV channel and the prices for most of the goods they will need.
Now let me take it to the basics.
The SPL could, probably would hire most goods. They would probably go down the same road as Setanta who hired a lot from local broadcasters. Thats full time expense without guaranteed income. By the way what happened with Setanta?
Now is this channel going to be on subscription TV or online?
By going online only, they shall alienate a number of fans that either don’t use the internet or that hate live streaming.
Going on TV they then have another out going expense and would need to sort out a deal with say SKY, BT, Virgin, Freeview or all of them and get a channel in months?
Not sure that timescale works, especially with SKY the main provider.
Instead of handing over all their cash without return, maybe they could buy some of their own equipment.
Now surely in this day and age they will want HD and broadcast quality equipment.
So for a cheap broadcast spec HD camera it will cost you £20k. That is bottom of the range. Now you can’t have one camera! You will need at least three to cover the live action games (Very minimum). There is a chance at least once a season you do two live games at the same time. So thats six cameras there. Then you will need at least one camera for the other 3 or 4 games so you will need another 3 cameras. So in total you will need at least 8 cameras a week.
Just so you know that is the smallest scale possible. SKY will use around 10 in a live SPL game. When I was over in Holland for a TV game and they had 30 cameras for a game they were also covering in 3D!
That’s at least £160k in camera equipment less the lenses that could cost up to £60k. Add the two you would need in case of two live games at same time and thats you up another £40k. Oh you’d also need at least one studio camera, thats at least another £30k although I would go for a better camera for that situation, so again even more money.
One camera game highlights, should we to expect the same as what RaithTV provide?
For the live game cameras you will need at least one Steadicam. The ones that SKY use come in at around £6k. Now again you may have two live games on same day, so will need two. Generally TV stations use more than one in live game.
For all these cameras you will need camera operators. That is at least 9 per week and on a big week 11. A good freelance camera person usually charges £400 per day. So 9 camera people x £400 = £3600 per week, for at least 38 weeks which would be £136,800. Thats going on one live game a week for a season.
Add a presenter, at least one commentator, three to four pundits, a gaffer for lighting, 3 people for sound, some riggers, at least one editor, director, producer and some runners/researchers. Thats about enough to cover a live game to a professional standard (again minimum).
Then there is the cushy job of full time Chief Executive for this channel, his or her PA, a possible media/PR person or department, an admin department that will deal with sales and complaints (say at least 4 people minimum.) Also at least one person to deal with processing the orders, though they could hire that out but thats another expense. These people will be on full time/permanent contracts.
So staff wages could put the costs through the roof.
Also are the SPL, who are not media savvy, able to bring in all these new employees within a month or two?
You will need your own state of the art editing studio. Plus editors who can use that equipment to a high level and under high pressured situations. Professional editing software costs £3k for the top of the range. A custom editing desk would cost between £6k to £10k.
Good luck hiring a studio for less than £1000 a day and thats with no equipment. They could use Hampden but the SFA will still want some cash for that.
For your live game you will need a satellite truck to edit footage and stream it live to the TV sets. If you have two games at the same time then you need two trucks or say you have two live games a weekend, one game is 5pm Kilmarnock and then the next is noon on the Sunday at Dingwall. That again means two trucks. These boys cost big money. At second hand it costs at least £80k and I will doubt those are HD compatible. New ones at a good standard will be £200k plus.
Now you will also need at least 9-11 tripods, Rainproof covers,20-22 camera batteries, 20-22 memory cards, industrial/professional cable, 4-4 radio mics, probably four headsets/mics for commentators, an auto-cue, TV’s, lighting and monitors.
Then there is a fleet of vans to ferry the equipment to the grounds. Plus company cars and phones.
So to do it properly, the equipment alone would cost hundreds of thousands of pounds. Again this is given a timescale of ‘months’ by Raith Rovers.
Then you have to insure it all, back to the bank as your balance goes down further.
Now we have the equipment and staff. We have a channel. Lets make some cash.
We can offer advertising on our channel. Butt we need to have subscribers for the advertisers to get excited about. We at least have the Old Firm , a huge match with a worldwide audience…. Oh wait!
So you get subscribers. Lets set a price…
For ESPN in the UK you pay either £10 a month if you already have Sky Sports or you have to pay £13 if you don’t. ESPN UK next season offer EPL games, FA Cup games, international football, Serie A, Bundesliga, Ligue 1, the Eredivisie, UEFA Europa League and the MLS plus NBA, NFL, MLB, UFC, rugby and filler programmes such as Press Pass and 30/30 documentaries.
So say you have Sky and the sports package thats £39 per month add ESPN and you go up to £49, how much could you sell SPL TV for?
You have a niche market, one that without both sides of the Old Firm shrinks, that is a fact. Rangers have a fan base of 50k plus in the UK. I am unsure the majority of them will buy SPL TV for the fact they are not in it, the quality on offer isn’t great and the fact some just wont give the SPL any of their money.
So your niche is now smaller. You can’t offer the same amount of product as ESPN or the same quality as ESPN, so can you charge more than £13?
I have heard people say SPL TV could cost between £15-£25 a month?
For one flawed product, that can’t guarantee quality on the park or production value off it?
MUTV and Chelsea TV offer channels for £6 a month. They give out game highlights, interviews and documentaries. They are also niches but probably have bigger worldwide audiences. I think that SPL TV can charge more than these two as fans will want to see some live Scottish football.
So the fee I’d come up with is £10 a month.
That puts the price for a Sky Package that has all the sports plus ESPN and SPL TV up to £59 with the HD option putting up to £69. Now some might just want SPL TV only, so thats costing you SKY plus SPL TV so say £30-£33 a month. Some may have it all plus the movies on a HD package thats going to come in at £77-£80 a month.
Some actually said SPL TV should cost £25 a month!
For what?
Ross County versus Hibs, Aberdeen v Kilmarnock, for Celtic to run away with the league. Really you would add £25 onto your out going bills to watch that on a channel that can’t guarantee quality on the park or off it.
Say 200,000 people subscribe for £10, that gives you £2m a month. This is a high estimate.
So that is a healthy income of £20m in ten months but before tax. Takeaway the cost of say £5m to start it up and then a few million to inject into it for the season ahead. That is you now getting £13m, again before tax. If you get 200k subscribers (thats a big if) then you have to up the amount of staff, so more money going on wages/tax.
Still that looks ok.
But say the subscriptions are closer to 100k – 150k, then that takes your income to £1m-£1.5m a month. For ten months that’s £10m-£15m. But then you figure in tax, costs and next seasons budgeting and that could take you way down in profit that you then split 12 ways. Oh and then the £2m owed to the SFL a season.
Your profit would be less than the secondary deal already on offer by ESPN.
Now the first season goes by and the SPL was poor. Celtic ran away with the league, another team comfortably finishes in second but miles behind the champions and a team get relegated early doors. The standard of football is decent to poor. The coverage is very shoddy especially at the start when their is a lot of teething technical issues.
Then there is the treat of illegal streaming online that people would use rather than subscribe.
What will happen?
Yes, viewers will leave SPL TV.
That said an exciting season and a well run organisation could see numbers increase but not dramatically in my opinion.
Now I say between 100,000 – 200,000 subscriptions for a reason. The ratings that I have seen for SKY suggest that when an Old Firm side plays a non Old Firm team they get between 100k – 170k. One that doesn’t involve either side can get as little as 35000 viewers.
Now including four Old Firm games the average SPL TV audience a season is between 200k and 250k. You then have to take out the bulk of Rangers fans and a group of TV viewers that watch the odd game as it was on SKY but wont buy the SPL TV package.
These are just figures I have heard but they are realistic.
So you go to advertisers.
You will have to offer them a good deal to keep them away from SKY, ESPN and eventually BT Vision. Again SPL TV is covering a small niche market, so limiting your possible scope of advertisers and lowering the deal again.
Then say you offer a cheap deal to a company. If I were that company I would say to SKY or whoever, this is what these guys are offering, can you do better? The broadcasters have more money and if they are a cutthroat operator then they will offer a better deal in the short term.
So advertising may not make you the large amount of cash you suspected it would.
Back in early 2011 the SPL asked IMG to look at the possibility of starting their own tv network. I have never heard of the findings and since then SPL agreed the flawed deal with SKY/ESPN. That tells its own story.
So who would pay for this TV channel, that will cost millions?
Well the SPL of course. They don’t have the media/production background but who cares right? It can be done in months right?
They would start off this project with a £15m black-hole through lack of TV revenue they will have budgeted for plus the threat of other sponsors pulling out.
Can the SPL and there members take such a risk?
Possibly within time but not in a matter of months.
The fact is this idea in the short term is a non-starter. Unless you want a pathetic attempt that will fall on its face and fail. The Setanta administration and the failure of ITV Digital should show people this isn’t an idea that you can rush through and expect an immediate return from.
Raith Rovers are in a land of fantasy or at best have offered Scottish footballing fans false hope.
A lot of this article is based on facts and experience.
By all means vote for your ‘sporting integrity’ and send Rangers Newco into Division Three, I am for that but do it knowing the threat of less TV money is one hell of a strong possibility and that SPL TV can’t be done in time for next season!