W ithin the broadcasting industry, BT Vision buying up the remainder of ESPN's football rights last week came as no surprise.
The company had revealed their strategy last summer when they bid high and aggressively for tranches of the Barclay's Premier League rights thus announcing themselves as the latest company to try to challenge Sky's dominance of the market.
The consequence for Scottish football is a period of reassurance. ESPN had long been known to be considering an exit strategy, so the Scottish Premier League could not be wholly sure, beyond the terms of their contract with the broadcaster, what the future held. Now they know for certain that BT Vision will honour the terms of the contract until it ends in 2017. And then what?
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The company, led by BT Group chief executive Ian Livingston, is attempting to compete with Sky and Virgin in terms of content and digital revenues, rather than relying on delivering the hardware for internet, television and telephone services into homes. It is the subscription market that they want to make headway into and the group identified content as being the key generator for new and existing customers. Like Sky before them, BT also understood that football is the primary driver for people to subscribe.
Capturing some of the Barclays Premier League content, through BT Vision, was considered integral to their business plan. Recognising that they were under pressure, Sky paid £2.28bn for their packages of 115 matches, but BT still bought 18 "first picks". For football, the entry of a new player into the broadcast rights market is a boon, since it continues to push prices up, but city analysts believe that both companies were stretched in the bidding process.
BT Vision are only the latest to try to take on Sky's football coverage, with ITV Digital and Setanta failing decisively, while ESPN eventually lost heart with the project. It is a career-defining strategy for Livingston, who used to work alongside the Sky chief executive, Jeremy Darroch, when they were both at the electrical retailer Dixons. Livingston is also a non-executive director of Celtic, which will go some way to ensuring BT Vision's long-term commitment to Scottish football.
"The BT deal is a major result for the SPL," said Colin Davidson, a former executive producer of both Sky and Setanta's Scottish football coverage. "They have deep pockets and big ambitions so forging a relationship with them is no bad thing. I don't think anyone should be getting carried away though. The SPL will be a very small part of a big sports portfolio that BT is building and the central plank is and always will be the EPL.
"Sky will be well aware that the competition they face this time is stiffer than anything they've had to deal with before. If BT have a head of steam up by then they could go for the jackpot, and the winners there will be the rights owners. The Scottish game needs to understand its place in the broadcasting food chain and surely events of recent years will have done that."
TV revenue is everything for Scottish football right now, though, since other commercial income streams are not as reliable. Protecting the current Sky deal is one of the reasons why the single league body proposed under reconstruction – the Scottish Professional Football League – will not be a new corporate entity but a rebranded SPL Ltd, with the same company number but newly drafted articles of association and rules, which the member clubs will have to agree on. Existing commercial contracts can be novated in the event of a takeover or merger but this would open up room for renegotiations, which the league will not be keen on.
"The interesting thing for the SPL is they have a foot in both camps until 2017 so they can pretty much watch the whole thing unfold and be friends with both broadcasters," said Davidson. "By the time their rights come up again you would expect Rangers to be back in the top tier. At that point, it'll be interesting to see if either Sky or BT would be looking for some kind of exclusive deal. What the SPL want is aggressive competition between broadcasters in the hope that they can cash in long term.
"As for a British League, that's a total non-starter. The EPL doesn't need to consider changing their structure as long a s the television money keeps rolling in, and as long as there is competition for their rights that will happen. Anyone who thinks TV will be the driver here is deluded. If any broadcaster tried to tell the EPL how to run and structure their organisation then they'd simply fold their tent and go to another broadcaster."