Page 119 - Sport Culture and the Media

100 || SPORT, CULTURE AND THE MEDIA

experienced a sobering challenge to its belief in its own invincibility. As two
commentators note:

It is widely acknowledged that the modern sports era began ten years
ago [1992], when Foxtel Chairman, Sam Chisholm, then Chief Executive
of Rupert Murdoch’s satellite broadcaster BSkyB, was given approval by
Murdoch to outbid BSkyB’s rivals for the television rights to the new
English Premier League.
BSkyB ended up paying what at the time seemed the enormous sum of
£304 million for the four-year deal . . . Until this year [2002], television
rights payments for major sports continued to be ratcheted up each time
they came up for grabs. In 1993, Murdoch’s US Fox Network virtually
doubled what rival television networks had been paying for National
Football League rights packages; and then went on to invest in ice hockey,
college football and baseball. When the English Premier League’s tele-
vision rights next came up for negotiation, in 1996, BSkyB retained them
in the face of spirited bidding, for £674 million, or £168.5 million a season,
a rise of 121% and in June 2000, BSkyB won them for a further three years
for £1.11 billion, another 120% jump.
(Eckersley and Benton 2002: 20)

While some English soccer clubs claimed that the initial broadcast rights were
originally undervalued, and that Murdoch quickly recouped his investment,
there is no doubt that revenues to broadcasters would have to be spectacular
indeed to match this escalating level of cost. They were not. Ironically,
Murdoch, who famously told his shareholders in 1996 that he would ‘use sports
as a battering ram and a lead offering in all our pay television operations’
(quoted in Millar 1998: 3), and was willing to acquire broadcast sports rights at
almost any price, now complained that ‘prices being paid to sport and sporting
bodies have got beyond an economic level’ (quoted in Eckersley and Benton
2002: 20). Sport, as noted above in the case of Super League, is crucial to the
development of new broadcast services, and to converging telecommunications
and computing services. As a result, it becomes (usually willingly) entangled
with major corporate strategies, gambles and power plays. In this case, it was
‘News’s plans for a global pay TV network’ that came unstuck ‘when its bid to
buy the DirecTV satellite pay TV operation from General Motors was rejected’
(Maiden 2002: 33). The value of the broadcast rights fell, therefore, as the
promise of fully globalized subscription services receded once more, leaving
Murdoch’s ‘chief lieutenant, Peter Chernin, [to] put it even more bluntly,
saying “clearly, you would have to say we’ve overpaid”’ (Maiden 2002: 33).
Compounding the problem was the post-recession and September 11th fall
in advertising revenue, with Murdoch describing the advertising market as