Charlie-Brown Posted September 24, 2008 Share Posted September 24, 2008 As it says on the tin - these guys are financing UK football to a massive degree ..... what are their prospects in a period of economic downturn? Is paying for live-football on the telly a product with inelastic demand? (ie a necessity?) will it always attract major advertising spending? Link to comment Share on other sites More sharing options...
Toxteth O'Grady Posted September 24, 2008 Share Posted September 24, 2008 As it says on the tin - these guys are financing UK football to a massive degree ..... what are their prospects in a period of economic downturn? Is paying for live-football on the telly a product with inelastic demand? (ie a necessity?) will it always attract major advertising spending? Anything that leads to Scott Booth being on the dole can only be a good thing:p Link to comment Share on other sites More sharing options...
Do The Dance Posted September 24, 2008 Share Posted September 24, 2008 Well I reckon Sky/Setanta could find a lot of customers leaving them over the next few months by people who are already struggling to get by. With gas/electricity, fuel, home and food prices going up, people will have less money for things like Sky. Link to comment Share on other sites More sharing options...
Jambof3tornado Posted September 24, 2008 Share Posted September 24, 2008 1/ They will survive. 2/ Yes. Link to comment Share on other sites More sharing options...
troonjambo Posted September 24, 2008 Share Posted September 24, 2008 i think sky wouls struggle in a reccesion when things get tight you look down your direct debits and sky and your gym memberships are the first to bight the dust Link to comment Share on other sites More sharing options...
Charlie-Brown Posted September 24, 2008 Author Share Posted September 24, 2008 Customer subscription numbers and the price they can charge to keep customers might fall but I think their advertising revenues are probably under greater threat of falling as companies tighten their belts? Link to comment Share on other sites More sharing options...
Drylaw Hearts Posted September 24, 2008 Share Posted September 24, 2008 For less than ?15 for Setanta a month you can get 4-6 EPL matches and 4-6 SPL matches live. Plus highlights packages, games from all over Europe and the odd International match. If people are looking for value for money then they may decide not to bother going to watch Football in person but resort to becoming an 'armchair supporter'. Link to comment Share on other sites More sharing options...
Guest jambomickey Posted September 24, 2008 Share Posted September 24, 2008 For less than ?15 for Setanta a month you can get 4-6 EPL matches and 4-6 SPL matches live. Plus highlights packages, games from all over Europe and the odd International match. If people are looking for value for money then they may decide not to bother going to watch Football in person but resort to becoming an 'armchair supporter'. are you a market researcher for setanta mate? ha ha Link to comment Share on other sites More sharing options...
dodemac Posted September 24, 2008 Share Posted September 24, 2008 As it says on the tin - these guys are financing UK football to a massive degree ..... what are their prospects in a period of economic downturn? Is paying for live-football on the telly a product with inelastic demand? (ie a necessity?) will it always attract major advertising spending? oh dear elasticity!!!! I hate that subject it is an elastic product not inelastic in my books :) Link to comment Share on other sites More sharing options...
Drylaw Hearts Posted September 24, 2008 Share Posted September 24, 2008 are you a market researcher for setanta mate? ha ha A promoter. Link to comment Share on other sites More sharing options...
Guest Roop Posted September 24, 2008 Share Posted September 24, 2008 Setanta's plan has always been to get bought out by someone such as ESPN. With the markets as they are that isn't going to happen. As I understand it they have enough cash to get through the next 12 months or so but they were really hoping to have sold the station this winter. I'd imagine that Sky/News Corp/Fox etc. will be fine. Link to comment Share on other sites More sharing options...
shaun.lawson Posted September 24, 2008 Share Posted September 24, 2008 SKY - no. Setanta - yes. They've gambled on developing a considerably bigger audience than they have at present: hence the hard bargain they attempted to strike with the BBC and ITV over the Croatia-England game. It's been good to see someone at least attempt to challenge SKY and not get swept away immediately; but many analysts have concerns over Setanta's future, I'm afraid. Link to comment Share on other sites More sharing options...
Cigaro Posted September 24, 2008 Share Posted September 24, 2008 How much do Hearts rely upon income from TV? Link to comment Share on other sites More sharing options...
Drylaw Hearts Posted September 24, 2008 Share Posted September 24, 2008 How much do Hearts rely upon income from TV? I would guess they budget for the minimum amount of matches that you have to be involved in which is something like 4 home games. Anything else means we would be taking a financial risk...... Link to comment Share on other sites More sharing options...
Charlie-Brown Posted September 24, 2008 Author Share Posted September 24, 2008 Sky sports advertising on this thread Link to comment Share on other sites More sharing options...
super_vlad Posted September 24, 2008 Share Posted September 24, 2008 Sky are in real trouble, not because of domestic customers but the on-trade. If you look at sky's figures, than it is easy to see where their make there money and how they have managed to fund the EPL to the tune of 1 billion. It is the core pubs that will lead to sky's problems. There is a court case gong thru the european courts right now against sky. What the pubs are claiming is that they should be allowed to use italy/greece sat companys to provide them with football as they are all in the EU. Now this case has gone throught the high court here, and they agreed to let europe sort it out. Now, IF sky lose in court, they will potenitally lose millions and mean the end of pubs paying 2000 pounds a month for the right of football being shown. Link to comment Share on other sites More sharing options...
Chester™ Posted September 24, 2008 Share Posted September 24, 2008 Setanta's plan has always been to get bought out by someone such as ESPN. With the markets as they are that isn't going to happen. As I understand it they have enough cash to get through the next 12 months or so but they were really hoping to have sold the station this winter. I'd imagine that Sky/News Corp/Fox etc. will be fine. Setanta have already sold NASN to ESPN (over a year IIRC) and have been in talks to sell the rest over the last 6 or so months. Sky will be fine. There are enough idiots out there that buy up other parts of NewsCorp/Fox that any losses (if any at all) can be swallowed up by the rest. I think many would be surprised to find that Sky etc is one of the last things to go in such times. Link to comment Share on other sites More sharing options...
Geoff Kilpatrick Posted September 24, 2008 Share Posted September 24, 2008 Setanta have already sold NASN to ESPN (over a year IIRC) and have been in talks to sell the rest over the last 6 or so months. Sky will be fine. There are enough idiots out there that buy up other parts of NewsCorp/Fox that any losses (if any at all) can be swallowed up by the rest. I think many would be surprised to find that Sky etc is one of the last things to go in such times. I agree with that. People will cut back on going out and resort to surfing the TV to find something entertaining instead. Link to comment Share on other sites More sharing options...
Charlie-Brown Posted September 25, 2008 Author Share Posted September 25, 2008 I agree with that. People will cut back on going out and resort to surfing the TV to find something entertaining instead. I agree with that GK however could their advertising and subscription income be squeezed enough to threaten the amount of money they are able throw at massive tv coverage deals for football? Link to comment Share on other sites More sharing options...
Geoff Kilpatrick Posted September 25, 2008 Share Posted September 25, 2008 I agree with that GK however could their advertising and subscription income be squeezed enough to threaten the amount of money they are able throw at massive tv coverage deals for football? In Sky's case, it is an interesting question. They are the main platform (well News Corp is) for showing the Premiership overseas and the appetite seems to be insatiable for Premiership football. Therefore, I think their income stream from it worldwide is so valuable that I would doubt that any future deals would go down that much. I can't see them getting much higher though. Therefore, any downturn in UK subscriptions may be offset from the overseas income from the whole group. Link to comment Share on other sites More sharing options...
Chester™ Posted September 25, 2008 Share Posted September 25, 2008 I agree with that GK however could their advertising and subscription income be squeezed enough to threaten the amount of money they are able throw at massive tv coverage deals for football? No. You do realise that Setanta are based in most major European countries as well as across North America? They would have to lose a helluva lot to worry about the deals they have negotiated. Link to comment Share on other sites More sharing options...
siegementality Posted September 25, 2008 Share Posted September 25, 2008 As it says on the tin - these guys are financing UK football to a massive degree ..... what are their prospects in a period of economic downturn? Is paying for live-football on the telly a product with inelastic demand? (ie a necessity?) will it always attract major advertising spending? As the credit crunch takes a bigger hold people will have less money to go out, therefore they will stay in, therefore they will watch the telly, terrestrial telly is pants, therefore they will watch Sky. So Sky are safe. Setanta are just a money laundering outlet for PIRA. Link to comment Share on other sites More sharing options...
Geoff Kilpatrick Posted September 25, 2008 Share Posted September 25, 2008 As the credit crunch takes a bigger hold people will have less money to go out, therefore they will stay in, therefore they will watch the telly, terrestrial telly is pants, therefore they will watch Sky. So Sky are safe. Setanta are just a money laundering outlet for PIRA. Ha! After the Northern Bank robbery they don't need to worry about that. That was their pension fund. Link to comment Share on other sites More sharing options...
Coco Posted September 25, 2008 Share Posted September 25, 2008 Sky's share price has fallen by 40% in the last year. Analyst forecasts of their earnings have been falling for the last 3 years. So the markets might been predicting that they will be negatively affected. Link to comment Share on other sites More sharing options...
topcat Posted September 25, 2008 Share Posted September 25, 2008 Sky's share price has fallen by 40% in the last year. Analyst forecasts of their earnings have been falling for the last 3 years. So the markets might been predicting that they will be negatively affected. Sky's share price has been falling by 15% pa on average since they peaked in March 2000 Link to comment Share on other sites More sharing options...
WalterEgo Posted September 25, 2008 Share Posted September 25, 2008 Analyst forecasts of their earnings have been falling for the last 3 years. But have their earnings actually fallen? Have their subscriber numbers fallen? On another note, Sky is a much more diverse business than might be immediately apparent to the casual observer. Link to comment Share on other sites More sharing options...
rumbles1874 Posted September 25, 2008 Share Posted September 25, 2008 trust m sky will nhot be affected by it to much trust me Link to comment Share on other sites More sharing options...
Walter Payton Posted September 25, 2008 Share Posted September 25, 2008 trust m sky will nhot be affected by it to much trust me Cheers Rupert. Link to comment Share on other sites More sharing options...
happyjam Posted September 25, 2008 Share Posted September 25, 2008 After HBOS, anything is possible. As far as I am aware Skys' main two revenue streams are advertising and customer subscription fees to it's services. I think it would be a fair assumption to suggest that there is a strong correlation to these streams. Therefore Sky's main priority will be to retain it's customer base. Based on reports it's pretty clear that Skys' income streams will be affected by the credit crunch, at best over the short term. If customer numbers start to fall dramatically I would expect SKY to introduce new cheaper products in order to retain their customer base. As for football, they are unlikely to break the current contracts, however, future contracts could be substantially reduced, with the possibly that payments are based on customer numbers/subscriptions as opposed to a flat fee. Link to comment Share on other sites More sharing options...
marshallschunkychicken Posted September 25, 2008 Share Posted September 25, 2008 I know of two pubs that have recently cancelled their Sky and Setanta subscriptions as said companies are now taking the p**s trying to squeeze them for ridiculous amounts of cash per year. Link to comment Share on other sites More sharing options...
spacerjoe Posted September 25, 2008 Share Posted September 25, 2008 I agree with that GK however could their advertising and subscription income be squeezed enough to threaten the amount of money they are able throw at massive tv coverage deals for football? Marketing costs are always the first to be culled from any budgets, so the risk is there, although I would seriously doubt that they would run out of advertisers to fill space. One problem the EPL may face though, is if Setanta were to fold, there would be no 'genuine' counterbid for future seasons and thus SKY could potentially drop their bid. Could be quite damaging for many clubs. Link to comment Share on other sites More sharing options...
rossmaroon Posted September 25, 2008 Share Posted September 25, 2008 For less than ?15 for Setanta a month you can get 4-6 EPL matches and 4-6 SPL matches live. Plus highlights packages, games from all over Europe and the odd International match. If people are looking for value for money then they may decide not to bother going to watch Football in person but resort to becoming an 'armchair supporter'. There a fair few of them on this forum, already Link to comment Share on other sites More sharing options...
Charlie-Brown Posted September 25, 2008 Author Share Posted September 25, 2008 'Armchair' supporters? Is that what Hibs took to hampden on 02/04/06? Link to comment Share on other sites More sharing options...
Chester™ Posted September 25, 2008 Share Posted September 25, 2008 There a fair few of them on this forum, already If you had the choice when times are hard what would you do? Minimum of ?20 for tickets per match plus whatever you choose to buy eg pints, pies, programmes or ?12 for Setanta per month or the price for Hearts World each month (I cant remember off the top of my head). You can see why many are choosing to stay at home. This is where the crux of the issue maybe. While Sky and Setanta are inflating wages etc, prices are being inflated which means a huge number of people are being forced out of watching the game at a ground. Link to comment Share on other sites More sharing options...
spacerjoe Posted September 25, 2008 Share Posted September 25, 2008 If you had the choice when times are hard what would you do? Minimum of ?20 for tickets per match plus whatever you choose to buy eg pints, pies, programmes or ?12 for Setanta per month or the price for Hearts World each month (I cant remember off the top of my head). You can see why many are choosing to stay at home. This is where the crux of the issue maybe. While Sky and Setanta are inflating wages etc, prices are being inflated which means a huge number of people are being forced out of watching the game at a ground. Setanta will show about 5 Hearts games this year if we're lucky. If subs are ?12.99 per month, that's ?156pa/5 = ?31.20 per game. Plus whatever you spend on beers/food while watching. Link to comment Share on other sites More sharing options...
Chester™ Posted September 25, 2008 Share Posted September 25, 2008 Setanta will show about 5 Hearts games this year if we're lucky. If subs are ?12.99 per month, that's ?156pa/5 = ?31.20 per game. Plus whatever you spend on beers/food while watching. Thats the not the point im getting at. When times are tough, choices get made and going to the match vis a vis sitting at home and watching any game on the telly will more than likely win out because of the cost. I also mentioned the likes of Hearts World which show all games and is cheaper than going to the games every other week. Lets not forget what team is the most watched on Setanta too. EDIT: while you mention what games get shown , they usually show all our home games vs Celtic, Rangers, Hibs (and the away games at ER) plus the Dons. You take only the cost of those games to attend and it still costs more to attend than sit and watch at home. Link to comment Share on other sites More sharing options...
The xx Posted September 25, 2008 Share Posted September 25, 2008 Not only is Rupert Murdoch on of the richest men in the world, I am pretty sure he owns most of Sky's competition. He has newspapers, radio stations and tv channels channels all over the world. Link to comment Share on other sites More sharing options...
Spikey Posted September 25, 2008 Share Posted September 25, 2008 Watching live football is simply too expensive. ?20-?30 for spl games is highway robbery, there is almost zero value for money. Attending 2 games a month equates to a sky and setanta subscription where you can watch countless matches from the comfort of your own home. No one should feel bad for not going to football matches. Fans have been priced out of the game. Link to comment Share on other sites More sharing options...
topcat Posted September 25, 2008 Share Posted September 25, 2008 Marketing costs are always the first to be culled from any budgets, so the risk is there, although I would seriously doubt that they would run out of advertisers to fill space. One problem the EPL may face though, is if Setanta were to fold, there would be no 'genuine' counterbid for future seasons and thus SKY could potentially drop their bid. Could be quite damaging for many clubs. If revenues from advertising and subscriptions do drop then one would expect the market rate for broadcast rights to fall as well even if Setanta don't drop out of the race. The Premier League is however shielded, to some extent, from local economic difficulties because it's audience is global. They may not be able to command as much for the rights to show games in the UK but the growth in eastern markets will soften the blow. From http://news.bbc.co.uk/sport1/hi/football/eng_prem/7232378.stm In 2001, the Premier League made ?1bn from the sale of domestic TV rights and ?178m from overseas rights. For the current contract, which runs until 2010, the domestic rights cost ?1.7bn and the foreign rights had leapt to ?625m - the biggest overseas deal for sport in the world. Around ?100m of that was spent by NowTV to secure the rights for Hong Kong, Showtime Arabia stumped up around ?60m for the Middle East and North African market and WinTV spent ?50m to show games in China. The continued growth and huge appetite of the Premier League's worldwide audience is the reason foreign broadcasters are prepared to spend such huge amounts to show English football. The potential is vast - an estimated audience of one billion watched Manchester United's match with Arsenal in November 2007. Premier League games are broadcast to over 600m homes in 202 countries worldwide, and they are particularly popular in Asia and the Middle East. These figures are likely to be reflected when the bidding begins for the next Premier League TV deal in 2010. Even if nothing comes of the proposals to play Premier League games abroad, the cost of overseas rights is expected to match the domestic price in the near future. Link to comment Share on other sites More sharing options...
Walter Kidd Posted September 25, 2008 Share Posted September 25, 2008 Sky tried and failed in getting the Scottish Premier this season, and in doing so pushed up the price for Setanta as the majority of their subscriber base is in Scotland believe it or not. Sky are playing the long game at the moment as Setanta have built their house on sand due to a number of factors. Giving free Setanta to Cable Customers in the vain hope that audiences would go up being the main one. This would have enabled them to charge more for advertising but has failed majestically. There is a dark horse in the market called ESPN who are owned by the Disney Corp. and may make a massive offer the next time the rights come up, which in turn will make News Corp look very closely at their own bid. Whatever happens, Setanta, in my opinion, will not be here in 3 years. Link to comment Share on other sites More sharing options...
LH13 Posted September 25, 2008 Share Posted September 25, 2008 It may be a sign of cost cutting at Sky, as they are now issuing their skymag every two months rather than monthly from now. Link to comment Share on other sites More sharing options...
Chester™ Posted September 25, 2008 Share Posted September 25, 2008 I take it that is starting from now? I still get mine every month. It could also be the fact that they have received a number of complaints about it and that its a waste of time? Link to comment Share on other sites More sharing options...
grumpyespana Posted September 25, 2008 Share Posted September 25, 2008 Had a chat with our local freesat installer in Spain he was saying that setanta could appear on freesat in the near future as they are in a bad way, personally I think sky will buy them out. Grumpy. Link to comment Share on other sites More sharing options...
Deodato Posted September 26, 2008 Share Posted September 26, 2008 Good thread this, close to a topic I've been working on - the music industry in a recession. For an analysis of the implications there, check: The R Words: Recession and Royalties Worth picking up on the chart showing advertising revenue during the 1991-92 downturn as it can be characterised as being first to go down, and then first to come back up again. Very volatile. For Sky, one thing it has insulation from is 'lock in' through customer subscription - meaning that its easier to cut back on other 'goods' and (therefore) carry on paying ?30 pm via direct debit for See, Speak, Surf. On the other hand, as someone earlier rightly pointed out, the On Trade is critical to profitable revenue streams. Based on market intelligence, Pub Closures in the UK are now running at 36 per week. Ultimatley,it comes down to having a portfolio of revenue streams - not having all your eggs in one basket. Sky has that via B2B, B2C and their own Rights/Carriage Deal packages. ITV, arguably, is more vulnerable. For a more specific / technical analysis (if your really interested), worth looking at the on going debate over Contract Rights Renewal at ITV - you can see how regulation affects the situation too. Tough reading though! Good thread, many excellent contributions. Deodato Link to comment Share on other sites More sharing options...
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