The economic implications of sports broadcasting
The issue of access to broadcasts of major sporting events is a major policy concern. In Europe concern over access has led to a prohibition on any single broadcaster having a monopolyon the broadcasting of key sporting events. Both in North America and Europe the income from broadcasting has grown dramatically and is now as significant as gate revenue in the total income of major clubs. However, over-exposure of games on television may reduce paid attendance. There is considerable controversy over whether television has overall positive or negative effects on revenue across all clubs as opposed to the leading clubs in a sport. A related concern is broadcasters changing the nature of the game to make it more attractive to their viewers to the detriment of the live spectators. In addition there is a danger of competitive imbalance if individual clubs are allowed to negotiate their own television deals rather than have the league negotiate on behalf of all the members’ clubs. This has led to clashes with the competition authorities, particularly in Europe where there is no protection offered by an equivalent of the 1961 US Sports Broadcasting Act. There have been a number of high profile cases such as the Monopolies and Mergers Commission’s blocking of BSkyB’s attempt to take over Manchester United and the Restrictive Practices Court’s decision to allow the collective selling of television rights by the English Premier League.
KeywordsCompetition Authority Competitive Balance Premier League Alternative Investment Market Restrictive Practice
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