Miliband should intervene in the sale of football rights

In the sale of football TV rights, capitalism is acting against the consumer, against the companies, against the clubs. The only beneficiaries are the tiny number of top-rated players.

The recent 70% increase will by-pass everyone else and go directly to these players. So if Radamel Falcao gets £300,000 per game now, he can look forward to £510,000 per game next year. However, his talent will not increase by 70%. His productivity will not increase by 70%. The fans will not receive a 70% increase in benefit. This is the dysfunctional way the market works, in football rights.

The buyers of the rights, BT and Sky are uninterested in football itself. They want to sell TV in order to bundle telephone and broadband into the sale.
Football is unique as an anchor for the sales of these other products. But because fans have no other way to enjoy their team, the prices gets forced up by the commerce of phone, internet, TV. This is not healthy competition that drives down prices for consumers, but unhealthy competition that drives them up.

It has got so bad that most people are forced to go to the pub to watch a game of football, because they can’t afford it at home. Dads used to bond with sons over this game, but not anymore.

Sky and BT have already colluded in the recent auction, by setting informal agreements not to bid aggressively against each other in certain circumstances. The authorities turned a blind eye to what would normally be viewed as anti-competitive practice. Even with this effort at price fixing, they still mistrusted each other enough to push prices up by 70%.

It would be right and proper for a Labour government to intervene by legislating that the recent auction be nullified and that the price paid at the previous auction, 2013/14, be applied today. In other words, Mr Miliband would retrospectively ban an increase in the TV rights fees of the top competitions or leagues.

The games can be divided evenly between Sky and BT. Any argument over specific games can be decided by the toss of a coin. With the football rights out of the way, this would leave Sky and BT to compete on price and service.

This may seem a half measure, as I don’t know what it would mean for future auctions and whether they should be price fixed. The point is to reverse the recent increase, and see what effect it has. The details of a future intervention can be left till the future.

I’m loath to propose anything that would help a company of Rupert Murdoch, or the Tory supporting boss of BT. However, this is not about party tribalism, but whether a family can enjoy our national sport, without being surrounded by drunks.

It’s about the cost of living crisis. It’s about whether we should intervene to stop pointless inequality expanding in the name of our national culture.

It’s also about making a point, that the argument that says that the market is always right, is an argument of dogma, and not of common sense.

This would be a popular intervention in the market. It would be pro-business, pro-family and pro our national sport.

Mr Miliband should make this a Labour Party policy.

One Response to Miliband should intervene in the sale of football rights

  1. treborc says:

    The big directors are making money out of it chairman and of course some players well all players do benefits from the TV money.

    But the issue is labour decided it was OK to let Murdock take the games now he and the other groups are reaping the benefits, fan of course can lump it your not needed any more in the top league.

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