Why do Sky pay so much ?

[Leekbrookgull]

From what i understand the current Sky deal is worth around £1.5 billion over three years ? Why do they pay so much,we know that know other English broadcaster can match them and they saw off Setanta. What would happen if they offered on the next deal half what they are paying now ?

 

[gruntage]

Then ESPN will offer more. Simple

 

[Stat Brother]

Because without soccerball Sky have nothing.
They've reached a point where they now HAVE to pay their own inflated prices, when doing the next deal.

 

[seagullsovergrimsby]

Sky and ESPN have the deal sewn up between them , they are running a cartel and next time around Sky will have 4 packages and ESPN 2 , the only difference from Setanta is that ESPN wont have the two crap packages.

 

[Guy Fawkes]

Part of the reason could be to ensure that they get the rights to show games, as live matches are a big part of their appeal to their subscribers and without this, they risk losing a large part of their income.

Another reason could be that by paying so much, it allows the product (in this case the Premier League) to afford better players which makes it a more attractive proposition to subscribers - A better product = a better selling point = more income for Sky

 

[Colossal Squid]

There is absolutely no question that without live premiership football Sky would go bust. The Football Business - Fair Game in the 90s? by David Conn is a very good book on the subject of Sky's early days and their desperation to secure Premiership rights so as to avoid certain bankruptcy.

Unlike in the US we Brits won't pay over the odds for a few extra channels, it's having access to the national game that makes people pay for Sky.

Mind you what with the popularity of Sky+ and the lack of any serious alternative services it may be that these days they would survive without the sports channels, although they'd make nowhere near as much money as they do now

 

[Tom Hark Preston Park]

Reckon won't be long before SKY realise they are paying well over the odds and seriously reduce their renegotiation offer. Which will cause the whole wobbly deck of cards to come tumbling down around the Premiership's ears. Nobody's interested in, say, Wigan v Bolton no matter how much they try and hype it up. There's far too many piss-poor dreary teams in that division. Pubs like the Brewery Tap no longer think paying SKY £800 a month makes financial sense, and as for the global football market, as somebody pointed out recently, you're not going to sell many replica shirts at forty quid a throw when you can buy a near-replica for pennies. It's all going tits-up for sure.

 

[Nigella's Cream Pie]

There is absolutely no question that without live premiership football Sky would go bust. The Football Business - Fair Game in the 90s? by David Conn is a very good book on the subject of Sky's early days and their desperation to secure Premiership rights so as to avoid certain bankruptcy.

Unlike in the US we Brits won't pay over the odds for a few extra channels, it's having access to the national game that makes people pay for Sky.

Mind you what with the popularity of Sky+ and the lack of any serious alternative services it may be that these days they would survive without the sports channels, although they'd make nowhere near as much money as they do now

If it wasn't for the cricket and tennis, I wouldn't bother with Sky Sports, happy to watch footy highlights on BBC

 

[clapham_gull]

It works for both partners. Sky can sell it at the current prices and the Premier League obviously want as much as they can get. As for Sky going bust, well they took huge financial risks in the past but are making huge profits now.

I'd imagine the major threat to Sky is the Premier League and the clubs themselves, rather than another broadcaster. They could easily do the whole thing themselves in the future, I'd imagine economies of scale dictate that they don't at the moment.

However economies of scale change very quickly where technology is involved, especially in the TV industry.

 

[beorhthelm]

in another thread, theres somthing from the Observer that states 45% of the population is interested in football. thats 31 million potential customers. even thats a little off and it 45% of men, thats still a good 15 million or so. at £45 a month, thats a potential £8 billion a year market.

does this answer the question?