Tuesday, 27th March 2007

HEADLINES OF THE DAY

UEFA a Global Brand With Expected RM3.67 Billion Revenue

The Union of European Football Associations (UEFA) has come a long way from its beginnings in the 1950s as the governing body of European football to become a worldwide branding powerhouse that will chalk up 800 million euros (RM3.67 billion) annually until 2009 from television and sponsorship deals for the UEFA Champions League.

Its marketing and media rights director Philippe Le Floc’h said the annual tournament of Europe’s elite football clubs has been UEFA’s biggest global revenue contributor annually since the European Cup was rebranded and reformatted into the UEFA Champions League 15 years ago. “We control the TV rights for all the Champions League matches and we sell the rights and get sponsorship for a three- to four-year period. About 70% to 80% of the revenue collected will be distributed back to the clubs as prize money and TV rights.

Le Floc’h was in Kuala Lumpur for a three-day tour of the UEFA Champions League Trophy as part of UEFA’s initiative to acknowledge the importance of its audiences outside Europe. He said some 3.4 million Malaysians followed the UEFA Champions League on a regular basis. In the 2005/06 season, there was over 70 hours of coverage with 54 broadcasts on free TV in Malaysia.

Besides the UEFA Champions League, he said the regulatory body had recently taken over the distribution for the UEFA Cup from the quarterfinals stage onwards to increase interest in the competition, which features Europe’s second-tier clubs. He added that UEFA was expecting a turnover of €50 million annually from the competition for the next two years. After 2009, UEFA will assume control of the distribution rights from the first round of the competition.

In addition, Le Floc’h said UEFA was expecting €1.5 billion in revenue from the UEFA EURO 2008 tournament that will see 14 nations battle it out next year to be crowned champion of Europe. “Previously clubs sold the TV rights for their own home matches resulting in some matches being shown and others wouldn’t. Now, we have centralised the marketing for the UEFA Cup from the quarterfinals stage. We will start building the brand of the competition and bring in media partners to purchase the whole package,” Le Floc’h said. Source: The Edge Daily, 26th March 2007

FIFA Freezes Agencies Out in World Cup TV Rights Deal

Sports agencies have again been left out in the cold by Fifa after it extended its television rights deal with the European Broadcasting Union to cover the 2014 World Cup. The news follows the decision to return to the EBU for the 2010 World Cup rights, with the exception of the ‘big five’ markets of France, Germany, Italy, Spain and the UK, and Scandinavia, where the rights were sold in-house. Deals negotiated separately with broadcasters in these countries covered the 2014 World Cup as well as the 2010 edition, with the exception of Germany and Spain.

The selection of the EBU as the European rights distributor for the competition in 2010 and 2014 will allow public-service broadcasters in Europe to acquire rights through their EBU membership and underlines Fifa’s intention to make its flagship tournament available to the broadest possible worldwide audience. The media rights for the 2006 World Cup were distributed by the Infront Sports and Media sports agency but in June 2005 Fifa opted to return to the EBU, which last held the rights in 1998, as it sought to ‘improve the reach globally by going to the public broadcast channels.’

ARD and ZDF, the German public-service broadcasters, last week agreed a deal with Fifa worth €150 million ($199.2 million) to show all 64 matches of the World Cup in 2014, leaving Spain as the only country in Europe’s major five markets without a deal in place for the tournament. At the time of allocation of the 2010 rights to EBU, Fifa also announced that UK rights had been awarded to the BBC and ITV for 2010 and 2014, with the public-service broadcasters paying a small increase per tournament on their joint fee of $199 million for the 2006 World Cup.

TF1, the French commercial broadcaster, won free-to-air television rights for the 2010 and 2014 competitions in France, paying $153 million and $165 million respectively, while RAI, the Italian public service broadcaster, won all the rights for both tournaments paying an overall sum of $444 million. Rights in Scandinavia for 2010 and 2014 were acquired by a consortium of seven free-to-air broadcasters. JL: No fee was disclosed.

Fifa will now attempt to secure a deal in Spain for 2014, with the EBU distributing the remaining rights in Europe, and Football Media Services, a joint venture between Infront and Dentsu, marketing the rights in Asia.

Fifa's decision to team up with the EBU once more and make the 2010 and 2014 World Cups available to public-service broadcasters in Europe comes at the same time as Sportfive is struggling to agree deals in major European markets such as Germany and the UK for soccer's Euro 2008 European Championships. Sportfive is seeking about €150 million from ARD and ZDF for Euro 2008 rights, the same fee paid by the duo for all 2014 World Cup games, and the agency has so far failed to obtain the estimated $176 million it was looking for from the BBC and ITV in the UK.

It could now allocate some games to pay-television in that market, despite listed-events legislation that demands that the entire event is reserved for broadcast by free-to-air television. It could do so by claiming that it has not been offered a 'fair price' for the rights by free-to-air broadcasters. Source: Sportcal, 26th March 2007


WHAT’S THE BUZZ?

IMG Launches Man United Gadget

IMG Media and Manchester United are launching a Microsoft Windows Vista-enabled Man United Gadget on the club's official website, ManUtd.com. The Man United Vista Gadget is a mini-application that lives on a fan’s desktop, or within the Windows Vista Sidebar, which gives fans a free permanent official Manchester United presence on their desktop.

Clicking on it, fans can access live interactive news, video (including match footage) and audio. Fans will be able to personalise the Gadget, choosing which feeds they receive, for example, overseas fans may wish to de-select ticket news. Fans can even ‘dress’ their Gadget in any of three kits.

Mark Hargreaves, general manager of Manchester United Interactive, added: “The Man United Vista Gadget represents a new avenue of delivering information to users so that they can receive up to the minute information at their desktop without lifting a finger.” Source: Sports Media, 26th March 2007


SPORTS SHORTS

* The International Hockey Federation revealed excellent television results for the 2007 BDO Hockey Champions Trophy for women, held in Argentina in January, generating audiences of 47 million worldwide. Coverage exceeded 150 hours on 36 channels, including host broadcaster ESPN, Eurosport, Fox Sports (Australia), Ten Sports (Middle East & Indian Sub-Con) and Astro SuperSport (Malaysia). There were 96 live broadcasts. FIH reported a sponsorship value of €598,635 from 60 hours of screen time for BDO as title sponsor (calculated at 10% of advertising spot rate). Source: Sports Media, 26th March 2007

* The FIFA Club World Cup has been amended to include a qualification play-off match involving a team from the host nation and the champions of the Oceania region. The move is designed to create more interest among fans in the host nation. Japan will now be permitted to enter the winners of its J-league, in the play-off. The winners of the match will join the champions from each of Fifa’s five other confederations in the next round of the competition. Source: Sportcal, 26th March 2007


MORE NEWS

Singapore/Broadcast/General: Mulling Media Changes

Singapore’s Media Development Authority (MDA) is proposing a number of changes to the rules governing the country’s media sector, the Media Market Conduct Code. The changes are aimed, the MDA says, at nurturing “a pro-business environment while ensuring more media choices for the public”.

Among the proposed changes are expanding the code beyond broadcasting and print media to new media; adopting market and dominance definitions on a case-by-case basis rather than having them pre-defined; and adopting “a pro-active approach towards handling industry competition and public complaints by revising enforcement procedures to be more pro-industry”. That means the MDA would be obliged to make their analytical process arrive at preliminary decisions available to parties for comment, after which the MDA would issue either a revised decision or a final decision.

Also proposed is that media providers would not be able to “unreasonably” leverage on non-media affiliates’ market power. For instance, not accepting special treatment from an affiliate which owns distribution infrastructure. Submissions on the proposed changes are due by May 7. The MDA is aiming to issue the revised code in the fourth quarter of 2007. Source: Rapid TV News, 26th March 2007

Asia/General: Formula One Leads the Field in Far East

With the Formula One season underway, the Chinese market is likely to deliver the top numbers in 2007, as it did last year. In 2006, total F1 broadcast time in China on CCTV and Shanghai TV, reached 352 hours - third highest in the world behind Germany and Japan but China’s 276 race hours exceeded the other two markets (243 in Germany and 193 in Japan). The Chinese market generated 117 million unique viewers, largest total worldwide, according to Formula One Management.

The San Marino GP produced the top audience for a single race in China last season with 22.3 million viewers – better than the World Table Tennis Championships. The average audience for F1 in 2006 beat Chinese Super League football and Italian football, but trailed the National Basketball Association (NBA). The averages for table tennis, Super League, Italian football and NBA all declined in 2006 from the previous year, while F1 held steady. Source: Sports Media, 26th March 2007

Elsewhere/Rights: FA 'Reaches Target' for Media Rights Auction

The English Football Association is reported to have reached its target of £400 million ($785 million) in the bidding for the domestic media rights for its competitions, including home England international matches and the FA Cup, after a second round of bidding. Last week, the public-service-pay-television combination of the BBC and British Sky Broadcasting were set to renew deals to share the rights.

However, today it is reported that their joint £380-million offer for the rights for four years beginning with the 2008-09 season ‘may have’ been surpassed by a bid from commercial broadcaster ITV. Bidding may go to a third round. For the first time, England and FA Cup matches have been split into different packages as part of a 15-package rights offer from the FA, English soccer’s governing body. Presently the BBC pays £60 million and BSkyB pays £15 million a season, in a deal worth £300 million over four years.

ITV, whose soccer output is concentrated on the Champions League and Uefa Cup, the top European clubs competitions, previously televised FA Cup matches from 1998 to 2001. Meanwhile, BSkyB’s pay-television rival Setanta, is said to be interested in some of the lesser rights on offer, such as those for England under-21 matches. Source: Sportcal, EUFootball.biz, The Telegraph, 26th March 2007

Elsewhere/Rights: Host Country Joins Euro 2008 TV Rights Refuseniks

Broadcasters in Austria, one of the two hosts of Euro 2008 European Championships, are joining a group of broadcasters in top European soccer markets that are claiming that the price is too high. ORF, the Austrian public-service broadcaster, told the Kurier Daily: ‘We could have the broadcast rights tomorrow if we would pay the incredible fee that Uefa wants. I am strictly against it.’

Uefa said earlier that it had agreed a deal for SRG SSR, the Swiss public-service broadcaster, to broadcast live and highlights coverage of all 31 matches of Euro 2008. Agreement is yet to be reached in Germany, Spain and the UK. In France, it is understood that the rights will be shared by TF1 and M6, although this awaits confirmation. Italy’s Rai signed a contract for exclusive rights on significantly higher terms than for Euro 2004.

Uefa appointed Sportfive to distribute the rights to Euro 2008 on a territory-by-territory basis throughout Europe. Sportfive has targeted €600 million ($798 million) in rights sales for Euro 2008.

It is understood that UK’s BBC and ITV’s initial bids fell far short of the £90-million ($176-million) target that Sportfive had set itself for the UK market. However, Uefa has to some extent tied its own hands, by stipulating that about two-thirds of the matches (19 out of 31), in countries in which the national team is involved in the competition, must be shown on free-to-air television. The 2008 European Championships are scheduled for June 7 to 29, 2008. Source: Sportcal, 26th March 2007

Elsewhere/Rights: Canal+ Pays More For Top 14

The Ligue Nationale de Rugby has awarded television rights of French rugby top flight to Canal+ for four seasons from 2007 to 2011. Canal+ has agreed to show all 185 matches each season, with three matches of each round live on the main pay service and others available on pay-per-view. Canal+ will pay €24 million next season, eventually rising to €29 million in 2010-11, according to L’Equipe. Canal+ currently pays €20 million a year.

Alexandre Bompard, the head of sports at Canal+, said viewing of Top 14 has grown by 50% over the past four seasons. Public channel France 2 will show the Top 14 final this season on free-to-air television, shared with Canal+, but public TV did not win the same treatment for the next four seasons. Its offer of €700,000 for each final during the period was deemed insufficient, L’Equipe reported.

Canal+-owned Sport+ will share rights to the matches in the second division (D2), and Eurosport will show a weekly magazine covering the Top 14 and D2. Orange France acquired rights to show near-live video and highlights for mobile. Source: Sports Media, Sportcal, 26th March 2007

Elsewhere/Rights: TV Globo Scores World Cup Rights

TV Globo has bought exclusive rights for Brazil for FIFA's World Cup in South Africa 2010 and in South America in 2014. The net and FIFA inked the deal in December, but it has just been confirmed in TV Globo's 2006 fourth-quarter report. TV Globo could pay FIFA $340 million for the two Cups. But if FIFA does not pick Brazil to host the 2014 event, the price for the package drops to about $300 million. Brazil and Colombia are in the running to host the tourney, with Brazil the favorite.

The coin to cover the expenses will come from TV Globo's cash flow. Company reported total net revenue of $2.93 billion in 2006, up about 12% from the previous year. It took an average audience share of 53% in 2006. The net intends to share the 2010 and 2014 World Cup rights with other Brazilian media groups. Similar negotiations failed in the past, however, as rival webs refused to pay Globo's high asking price for the 2006 World Cup. Source: Variety, 26th March 2007

Elsewhere/Rights/New Media: Secondsout.Com Plan to Sue YouTube

The UK’s Times newspaper reports British boxing entrepreneur Robert Waterman is planning to sue YouTube for $1 million after it carried clips of the WBO World heavyweight boxing title bout between Vladimir Klitschko and Ray Austin from Germany on March 10. Waterman’s Secondsout.com had concluded a globally exclusive deal to screen the fight live on the internet – except in the USA and Germany. But, he says, over 100,000 people viewed fight action free on YouTube.

The move highlights one of the key challenges currently facing the sports media sector - the damaging impact that YouTube and other sites which allow video to be uploaded and shared for free are likely to have on rights markets for many sports. Waterman’s company operates Secondsout.com, one of the world’s most visited boxing portals. He has acquired a portfolio of rights for exclusive live fights which form the backbone of the Secondsout.tv subscription / Pay Per View service which can be accessed through Secondsout.com.

Waterman is an experienced boxing manager and promoter. He promotes fights all over the world and has worked extensively with the BBC and Sky Sport, HBO and Eurosport. He passionately believes that Internet-delivered television will be the financial lifeline for many sports which are unable to demand regular airtime through regular broadcasters. But he believes that video piracy, facilitated by YouTube and others will seriously damage that potential. Source: Sport Business, Sportcal, 26th March 2007

Elsewhere/General: Blatter Says World Cup Rotation Could End After 2014

FIFA president Sepp Blatter said the system of rotating the World Cup among continents could end after the 2014 tournament, a move that could hurt the United States' bid for 2018. "The FIFA executive committee has decided that the process of the rotation will go to 2014," Blatter said at a news conference Friday.

Whether it continues will be decided when the executive committee meets in Durban, South Africa, ahead of the 2010 qualifying draw on Nov. 23. That also is when the executive committee will select the site of the 2014 tournament, which is designated for South America and is likely to be in Brazil. Under the rotation system, the 2018 tournament would be in the North and Central American and Caribbean region. However, the British government has said it would back a bid by England.

FIFA also said its equity had gone from minus-$10.9 million in January 2003, following the collapse of its marketing partner ISL/ISMM, to $617 million last December. The World Cup ran a profit of $207 million, of which FIFA received $60 million. "Five years ago they wanted to send me to jail, and now I am getting a round of applause," Blatter said. "So you see how things can change." Source: Associated Press on EUFootball.biz, Minneapolis Star Tribune, Casper Star Tribune,26th March 2007

Global/New Media: Mobile Content to Double by 2011

The mobile content market globally is set to double in size between 2007 and 2011, according to a study from iSupply. While yesterday’s love affair with premium ring tones and downloadable wallpaper paved the way for enthusiastic new services, it is the content aggregators and providers who will drive growth.

iSupply say they expect Content Providers/Aggregators to see their take grow from today’s US$9.7 billion revenue to US$11.8 billion in 2008 and US$19.3 billion by 2011. Mobile operators themselves will see revenues grow from US$5.29 billion today, to US$6.13 billion in 2008 and US$8.53 billion by 2011. Content Enablement Platform Providers will also see benefits, from US$4.9 billion this year, to US$5.61 billion in 2008 and US$7.47 billion by 2011. Source: Rapid TV News, 26th March 2007