Two ways to break DStv’s sports rights monopoly without destroying sports funding

South Africa should adopt regulations that force sports bodies or associations to unbundle broadcasting rights into smaller packages and ensure the biggest rightsholders deal fairly when it comes to sublicensing.

That is the view of GIBS Media Leadership Think Tank head Michael Markovitz, who previously served on the board of the SABC.

The issue of sports broadcasting rights in South Africa has made headlines over the past year following standoffs between the SABC and MultiChoice over the rights to last year’s Rugby World Cup and Cricket World Cups.

In both cases, MultiChoice had secured the rights to the tournaments and opened up bids for sub-licencing by other broadcasters.

After drawn-out negotiations, the SABC secured the rights to broadcast all the Springboks and Proteas matches on its free-to-air channels, thanks to financial backing from several sponsors.

However, this came with a catch—it was not allowed to broadcast the matches on its channels on eMedia’s Openview free-to-view satellite TV service.

eMedia took MultiChoice to the Competition Tribunal and won an interim relief order against MultiChoice.

That prevents MultiChoice from requiring the SABC to exclude broadcasts or streaming of sub-licenced content on third-party platforms which host its free-to-air channels.

The order remains in force pending the outcome of eMedia’s case against MultiChoice, which will be heard in August 2024.

Among the complaints was that MultiChoice only opened tenders for free-to-air broadcasters to bid on sub-licensing rights five weeks before the start of major tournaments.

eMedia argued that this behaviour from MultiChoice deliberately undermined fair competition.

eMedia said bidders were unlikely to receive confirmation of broadcasting rights until less than two weeks before the event.

The broadcaster explained that this would not leave enough time to secure sponsors, arrange advertising, and adjust programming schedules. Therefore, eMedia declined to bid for the T20 Cricket World Cup.

The short turnaround for bidding also played a role in the SABC having to scramble for sponsors at the last minute to secure the broadcasting rights for last year’s World Cup matches.

Sub-licensing rules and unbundling

Markovitz believes that these legal issues could have been avoided had the Independent Communications Authority of South Africa (Icasa) adopted the SABC’s proposals for sports unbundling and fair sub-licensing criteria.

He explained that a fair sub-licensing criteria framework in Icasa’s sports broadcasting regulations could include appropriate timelines for opening up bidding for sub-licensing before the start of an event.

This can help broadcasters like the SABC and eMedia ensure that they can monetise the content they secure.

Markovitz said the short timeframe between the bid winner announcement and the event was particularly problematic for the SABC.

People would accuse the broadcaster of fruitless and wasteful expenditure if it failed to sell ad space during sports that cost it tens of millions of rand in sub-licencing fees.

With regards to unbundling, Markovitz pointed out how the European Union had broken UK broadcaster Sky’s 15-year monopoly on live English Premier League games to the benefit of other broadcasters.

Sky is the UK’s biggest pay-TV broadcaster and is effectively its version of DStv.

Two ways to break DStv’s sports rights monopoly without destroying sports funding
Michael Markovitz, head of the GIBS Media Leadership Think Tank and former SABC board member

In 2005, the European Commission and Premier League reached a deal that matches from the tournament would be broken up in separate tranches to allow more bidders to compete for them.

For example, for the upcoming 2025/2026 season, the Premier League awarded four live rights packages covering a minimum of 215 live matches per season to Sky Sports.

TNT Sports secured a live rights package tranche with 52 live matches per season, including exclusive coverage of matches played on Saturdays at 12:30 and full coverage of two midweek match rounds.

In contrast, Markovitz pointed out that the Premier Soccer League (PSL) in South Africa sold all its broadcasting and streaming rights to MultiChoice, including free-to-air rights, which he said would not have been allowed in Europe.

One big downside to unbundling is that serious fans who wish to watch nearly all matches must subscribe to more than one service.

Making less money

Another concern from sports associations is that they would make less money if one dominant player could not buy all the rights to a tournament.

A portion of the revenue made from the sale of sports rights goes towards sports professionals’ salaries and the development of the sport.

Markovitz emphasised that other broadcasters would still need to pay for the rights.

“There is no free lunch here, and no one is saying that they must get it for cheaper either,” Markovitz said.

He argued that the sports bodies could make more money, because each package would have to be bid for separately.

“You could say MultiChoice would not pay as much [for separate rights], but this has not been tested,” he said.

In the case of the Premier League in the UK, the money made from broadcasting rights increased substantially after the unbundling rules came into effect.

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