ANALYSIS

Icasa’s superficial regulation amendments for sports broadcasting changes nothing

By Craig Ray 16 April 2021

In South Africa, with its massive social inequality, a premium DStv package with access to 19 sports channels comes at a prohibitive R934 per month. (Photo: EPA / Jon Hrusa)

After months of deliberation, argument and debate, the broadcast regulator has reached a decision that it cannot force sporting bodies to show their competitions on free-to-air TV.

After two years of hearings into sports broadcasting regulations, the Independent Communications Authority of South Africa (Icasa) reached the only conclusion it could – that sports events on television would continue to be sold to the highest bidder.

The basis of the hearings was Section 60(1) of the Electronic Communications Act which provides that subscription broadcasting services “may not acquire exclusive rights that prevent or hinder the free-to-air broadcasting of national sporting events, as identified in the public interest from time to time”.

It’s a vague definition that is no clearer after this process.

Icasa’s attempt to redress what is essentially a free-market concept of selling to the best offer, is that the holder of the rights should “sub-license” their rights to free-to-air broadcasters in the national interest.

But Icasa conceded that it does not have the authority to set price limits on what those sub-licences should cost, which would have to be negotiated between the parties.

And the major party in question is MultiChoice. Until the early 1990s the SABC monopolised all sports coverage in South Africa until MultiChoice, through its subsidiary SuperSport, effectively bought all the rights to major and minor sports.

In the wake of Icasa’s ruling, SABC general manager Gary Rathbone told Sport24 that “nothing has changed” and that the regulator had “not addressed the real issue”. He argued that the SABC would continue to be “at the mercy of people who can afford to acquire the rights, who will dictate the terms of sub-licensing them to us”.

In other words, he is arguing against the concept of capitalism.

SuperSport monopoly

In South Africa’s current case the highest and most interested bidder is pay channel SuperSport. It has monopolised the sports broadcasting market in South Africa over the past 25 years and, to be brutally honest, has delivered world-class products for a fraction of what it would cost in any other first-world country.

SA Rugby and the PSL in particular argued that without the massive earnings from selling exclusive broadcast rights to SuperSport, they would not exist.

A recent story in the British press highlighted an interesting conundrum for die-hard sports fans. Residents of the UK, who want to watch all major sporting events on TV in 2021 – such as Wimbledon, the Premier League, European Championship Football, the Tour de France, the British Open golf, Formula One and cricket – would need 12 different services (see sidebar below).

Some platforms such as the BBC are free-to-air (although there is an annual licence fee of £130), but most of the sport has to be bought through Sky TV, Sky Sports, Eurosport, Amazon Prime, Virgin and BT Sport. Paying an additional £5 or £10 to watch an extra event can quickly total up.

The BBC, once the sole provider of news and sport in Britain and much of the English-speaking world, has long since ceased to be a major player as a broadcaster of live, or even recorded sport. 

During a presentation to Icasa in January 2021, eMedia CEO Khalik Sherrif said MultiChoice was so powerful that sports bodies feared them. (Photo: Gallo Images/Luba Lesolle)

The situation in Britain has evolved since companies such as Rupert Murdoch’s BSkyB arrived in the sports market offering lots of cash in exchange for exclusivity.

In South Africa, watching those same events and a host of others requires one SuperSport subscription. Unfortunately, in a country with such massive social inequality, a premium DStv package with access to 19 sports channels comes at a prohibitive R934 per month. 

Prohibitive, that is, for the majority of South Africans but also dirt cheap in the global context for the sheer volume of live sport.   

SuperSport now monopolises sports coverage in South Africa, not through its status as a parastatal, but through cold, hard cash, backed up by world-class coverage on events it produces. 

Exclusivity is the cornerstone of broadcast rights sales 

After much grumbling from the SABC and e.tv, Icasa stepped in and threatened to force the Premier Soccer League (PSL) and SA Rugby, among others, to put some of their competitions and matches on a free service for the general population to access.

Public hearings were held between 2018 and 2020, and submissions from MultiChoice, the PSL, SA Rugby, Netball South Africa and Cricket South Africa lobbied for the status quo to remain.

On the other side of the fence were the SABC and eMedia (e.tv), arguing that sports behind a paywall was denying the majority of South Africans the opportunity to watch their favourite sports.

During a presentation to Icasa in January 2021, eMedia CEO Khalik Sherrif said MultiChoice was so powerful that sports bodies feared them.

At the end of these exhaustive hearings and submissions, Icasa has made minor amendments to nine clauses of the 2010 regulations, but nothing that takes sport on TV away from the highest bidder. 

“This monstrous institution [Multichoice], having paid them the fees that they have been paid over the last many years, have these organisations scared to contemplate that if all this gets regulated, what happens to our money,” said Sherrif.   

“Cricket is losing audiences. In its stadiums, on TV – everywhere. What cricket needs is an injection from free-to-air, whether it be the SABC or ourselves. But can we afford to pay for it? No, we can’t. Why? Because they were paid huge amounts of money in the past.”

SA Rugby and the PSL in particular argued that without the massive earnings from selling exclusive broadcast rights to SuperSport, they would not exist.

“Exclusivity is the main source of our revenue and with less money it means there will be less rugby until we have to close our doors and only have club rugby. And then nobody will be interested in the game,” SA Rugby CEO Jurie Roux told the panel during a hearing in January.

“SA Rugby needs to produce compelling content that is commercially viable so we can develop the game from grassroots level to winning national teams. We are 99.7% self-funded – we get only 0.3% of our income from the government – and broadcast rights bring in R752-million.”

PSL chairperson Irvin Khoza also underlined the importance of broadcast rights fees to sustaining football. The PSL is currently in a five-year, R2-billion broadcast cycle with SuperSport.

“When the SABC recently expressed concern that it was in a disastrous financial situation, the PSL, together with the minister of sport [Nathi Mthethwa] and MultiChoice, were proactive in ensuring that the SABC acquired a significant amount of PSL rights – at an extremely fair price,” said Khoza.

“The PSL follows a tender process which is open to everyone who values these soccer rights. Rights are sold at regular intervals, and no one holds them permanently. There are no automatic renewals of contracts and everyone bids at the same time. Nothing stops other broadcasters forming a consortium to bid for the rights.”

At the end of these exhaustive hearings and submissions, Icasa has made minor amendments to nine clauses of the 2010 regulations, but nothing that takes sport on TV away from the highest bidder. 

The SABC argued that the original regulations did not address “competition in the market, funding of sport and the establishment of a sub-licence framework”, among other concerns. 

But those concerns were dismissed. 

Sidebar: How much are people paying for sports subscriptions in the UK and Ireland?

South African male in his 40s living in Dublin 

Okay, so I pay €130/month for my Sky package, but that includes entertainment channels. My sports bundles are as follows: Sky Sports Complete (€40/month) and Sports Extra (€34/month).

That entitles me to Sky’s seven sports channels (complete) and six other channels including BT’s three channels (Extra). Because there are so many bidders for individual sports, you don’t get saturation with just one channel (Sky, for example, doesn’t have rights to English rugby) so you have to take additional subscriptions.

Sky and BT basically cover me for most South African, New Zealand and Australian rugby while BT covers the Gallagher Premiership (which allows me to keep an eye on the Saffers playing in England).

I could – if I didn’t think it was a complete rip-off – I would also pay for an Eir Sports subscription. But, in rugby terms, that only gives me access to Pro14 which is also carried here (mostly as delayed live) by the Irish-language terrestrial channel.

So, I get to see De Allende and co but I can’t understand a word of the comms. Last time I checked, an Eir subscription was around €30/month for two channels.

As mentioned, I also think it’s a complete rip-off to pay extra for HD content (€8/month for HD or €12/month for UHD) so my SKY Sports content is only available in standard def. BT and Eir only offer HD content (as they should).

The one upside here is that national sports are generally carried by the terrestrial channels (some also get marquee sports like Champions League, but that changes from year to year depending on who wins the bidding war).

One final gripe: The best boxing and MMA content is generally only made available on Sky Box Office at an additional cost per event.

Moral of the story: nothing comes close to SuperSport’s offering.

Male, 30s, living in London

I get Sky – probably historical for me. I haggle crazy with Sky cos I’m stingy so our TV is something like £38 a month – sports is key for me though. BT at £24.99 is mad and then Amazon Prime I pay because of the delivery rather than the sports. My general view is get the package with the most coverage and forgo the plans that offer the least for me personally. So, that is Sky with football, cricket, golf, etc.

Male, 50s, living near Manchester

My most recent bill for TV, which includes all Sky Sport and BT Sport, was just £58.30 for the month. When superfast broadband and telephone, which included all calls, was added I paid just £105 for the lot. I also pay £130 per year for a BBC licence.

I subscribe to Sky for everything but there are various providers which makes the picture look rather fragmented but drives down costs. Virgin, BT and Sky sell TV packages which are all discounted when broadband and telephone are thrown in. South Africa is more a one-stop shop, but like all monopolies is expensive and of modest quality.

In the UK Premier League football is mostly on Sky with BT having roughly one game a week while Amazon Prime screens stuff around Christmas. Sky is now out of rugby (apart from the Lions) with BT having Premiership and Europe.

BT and Sky basically share the sport, with terrestrial chipping in on national-interest events. I, though, have both Sky Sports and BT within the same package on Sky. The best way to look at it is that Sky, Virgin and BT are platforms as well as content providers.”

Male, 30s, Bristol

I pay for Sky sports for football, cricket, golf and F1 mainly, but occasionally watch some other stuff on there. We also have Amazon Prime TV but more as an ancillary benefit. I get some football there. We have access to BT Sport but it’s someone else’s subscription we piggy back off – football and rugby on that.

Disney+ is growing in presence and there’s talk of them bidding for major sporting events. We pay £91 per month for Sky, approximately £20 of which is sport. BT Sport approximately £25 per month, Prime TV wrapped up in our Amazon subscription which is £8 a month, Disney+ £60 for the year. DM

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