Setanta’s troubles are hardly surprising

Setanta has lost the rights to their Premier League matches after failing to make a contractual payment.

I can’t say that I am surprised by this. While I don’t agree with Sky having a monopoly on coverage of a particular sport (or any other broadcaster for that matter), the European ruling that rights must be split between broadcasters was ill-conceived.

Prior to this, it was possible to pay one subscription to Sky and watch your team on Sky. When the rights were split, consumers (whose interest the ruling was supposed to favour) were faced with paying an extra ten quid a month to get the same as the previous season; Sky’s subscription did not reduce as a result. The European ruling completely failed to increase competition from the customers point of view; the only winners have been the rights holders as it has allowed them to split the rights packages and sell them for more than they would have got for the package as a whole. You have to wonder where the interests of those making the ruling really lay.

Competition requires the availability of a choice (such as a telephone company or electricity supplier) for the same service; Sky and Setanta were not providing the same service; you could not choose to watch the same match on Sky or Setanta.

Faced with this decision, only the most hardened fan would shell out another tenner (over 20% on top of Sky’s complete Sport/Film/Entertainment package) just to see a handful of matches, especially in a family household where the full Sky package is likely to be accepted by a spouse, but an extra tenner for sports would not go down well.

Even without the current economical downturn, Setanta were always facing a mammoth task to break even.

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