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.

Milibandism and the TV football market

Sky‘s dominance over televised football was recently shattered by the entry of British Telecom into the market. On the face of it, this competition should be exactly what our country needs, to bring down the outrageous expense of TV, as a small but significant strike against our cost of living crisis. However, the market for football rights is dysfunctional, and Sky may already be trying to undermine competitive pressures [link]. That’s why Milibandism needs to be applied.

If BT and Sky were competing for customers on equal terms and with equal products, then prices would naturally fall. The problem is that they can’t have an equal product. One or other will have the football rights and the customers will go straight to that provider. Therefore, the two companies will compete ferociously to buy this content, pushing the price up to astonishing levels, and wiping out the advantage the consumer would have gained through their competition.