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FIFA loses Free-to-Air battle for World Cup TV broadcast rights in UK

December 30th, 2013


World governing bodies for soccer like FIFA and UEFA have been giving away gold for years with soccer, and recently they’ve been asking to get some of it back. FIFA, which famously gives out a golden trophy every four years in the FIFA World Cup, along with UEFA, which runs the Champions League competition between international club teams in Europe, have become much more aware and interested in their TV rights around the world, as they can earn huge fees for the television broadcast contracts for the World Cup scheduling in Brazil in the summer of 2014.

As reported by Emily Torres on earlier this year, TV broadcast rights are set to explode in 2014, and the 2010 cup brought in billions in revenue for FIFA.

The two organizations battled in the European Court of Justice this year and last over whether European countries would be able to broadcast the entire world cup schedule free-to-air to their citizens over common channels. The countries consider the games “of national interest” and believe they should be seen by anyone and everyone. FIFA/UEFA however, see the issue as a long term problem for grassroots soccer, which FIFA says the TV contracts eventually trickle down to.

“This decision not only distorts competition in a free market, but also reduces the possibility to generate income that can then be distributed to the amateur game via solidarity payments. And it is such a solidarity distribution that allows the development of football at all levels, including women’s and grassroots, and is crucial for the well-being of football at the base of its pyramid,” an official for UEFA said.

FIFA had been gearing up to sell the cup on a Pay-for-TV basis in Europe at least in 2018 for television channels.

The UK and Belgium, among others, argued that the knock-out portion of the tournament represents a national interest to their citizens, and therefore couldn’t only be sold to premium channels.

The larger issue at hand is one of TV rights as digital media plunges ahead into the twenty-first century. There is much concern over where traditional media (like big time sporting events) is headed as technologies change and evolve.

For instance, say the digital market and landscape is beginning to move TV Drama to Netflix and HULU subscriptions instead of normal network TV. For most watchers, the technology change is of no issue. But what if it involves an elderly customer who isn’t as tech savvy? Or has never purchased anything online?

Users are still much less likely to pay for online content, even if it’s the same content at the same quality. Content providers can risk losing massive amounts of dollars, and views/customers, with a change in technology that doesn’t alter the content, but how it’s consumed. Many users want all their content on different digital outlets, while more old school customers want just the opposite. And this has huge effects on the profits of those providers.

Cultural events like the FIFA World Cup transcends sports, but they also need to be paid for. It will be interesting to see how the “pay by subscription” model could work with large cultural events like soccer in the future as media consumption moves towards newer (i.e. younger) technologies that aren’t as ubiquitous as television has been.

Info in this report from BBC and CNBC.

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