Economic pressure
SuperSport’s holding company is MultiChoice, and the video entertainment and internet company is expected to list on the Johannesburg Stock Exchange (JSE) this month, in February. To date, MultiChoice has been listed under Naspers, with Naspers being the wealthiest listed company on the JSE.
It’s unknown how MultiChoice will perform once listed, and any future broadcasting deals will be hugely impacted by the group’s overall performance.
Multichoice will soon be a standalone company on the JSE. This will open up the PSL deal to more scrutiny by the institutional investors. The scrutiny will be more vigorous on how profitable the deal will be for the shareholders.
The new broadcasting deal between the PSL the SuperSport will run for five years, which means that for five years a set income is expected; however, the long-term future will be dictated by the economy, and specifically MultiChoice’s performance in the economy. Will a multi-billion rand deal be negotiated again? Will MultiChoice be in a position to maintain the League’s financial position, or will they be forced to reassess it?
Changing landscape of football viewership
It’s clear that the TV rights are on the rise in the major leagues across the world, but even if the PSL stops the regulations from being passed, the League and SuperSport will have to adapt to the fast emerging digital age.
In June last year, online streaming service Amazon broke the monopoly held by Sky Sports and BT Sport on the coverage of the Premier League by announcing a ground-breaking deal to broadcast 20 matches on the internet for three season from this year.
An expert in the sport sponsorship circle told the Siya crew that this innovative way to beam football games would ultimately affect SuperSport. Digital disruption is a major factor in effecting the future of the sport industry for both rights holders and broadcasters, the expert argued. The surge and opportunity in streaming is much bigger than any sponsorship deal, potentially. And this would also explain why Vodacom – despite adding to Chiefs’ and Pirates’ financial muscle every year – have now started offering football content.
Vodacom has secured rights to the FA Cup in England for the 2018/19 season and are live streaming them through their Video Play app at R35 per match, which is essentially the cost for general access at a PSL game.
The possibility of watching games by simply pulling a phone out of our pocket, or on any digital device, creates a whole new way of watching for the viewer. This allows viewers to watch games from across the world at the touch of a button. Of course, data prices in South Africa are considered excessive compared to other parts of the world.
Where does this leave the PSL? How will they adapt and how will it affect SuperSport’s economic model and indirectly have an impact on their broadcasting deal with the PSL?
Supply & Demand will play it’s part…
The PSL deal with SuperSport is extremely lucrative. It’s the riches broadcast deal in Africa. However, it’s not all promising within Mzansi’s football.
SAFA is currently fighting its own battle with the SABC – the public broadcaster insisting recently that the value of Bafana Bafana matches is no longer what it used to be.
Until early last year, the SABC were paying SAFA R110 million a year, but have since argued these TV rights were no longer financially viable and reduced their offer significantly down to R10 million per annum.
Supporters’ attendances at stadiums are not helping either. With the attendances dwindling in recent years, sponsors will question the return of investment.
Sponsors want eyeballs at stadiums and on TV, and the clubs and the fans will have a big part to play in keeping the financial model alive.