Sky Sports recently confirmed that they had over 1.1m viewers tuning in for the Rangers vs Celtic clash in the Scottish Premiership.
The Old Firm derby ended 2-2, and there was late drama when the Hoops scored an equaliser in injury time.
Prior to that, Youssef Chermiti scored a wonderful goal that made the headlines and will be talked about for years to come, adding to the appeal of the Scottish game.
Rangers can expect to get over £16m by sale of rights
Looking at Sky Sports’ announcement, STV Radio host Ewen Cameron took a dig at the Scottish FA, as the £30m broadcasting deal is not funnelled down properly to support the national game.
It also led to a broader conversation about clubs potentially selling their own rights by bypassing the likes of Sky and Premier Sports.
As Rangers previously were the only club to oppose the £30m broadcasting deal, Adam Williams, GRV Media’s Head of Football Finance and Governance Content, explored what a dream scenario would be for the club.
He told Rangers News exclusively: “If we get more title races like the current one, I’d anticipate that they could get a better deal from Sky, but Hearts and other challengers can only fight gravity for so long. Rangers and Celtic dominate in terms of commercial and matchday income to such an extent that it is unrealistic to expect regular title challengers from elsewhere in the long run. To address that, you’d need to change Scottish football’s entire financial distribution system, and you’d run into legal challenges and, obviously, pushback from the Glasgow clubs.
“In an ideal world, Rangers would like to sell their own rights. The club purports to have nine million fans worldwide. They are probably being liberal with the estimate there, but if even one per cent of those fans subscribed to an in-house Rangers streaming service that aired all their games for £15 per month, you’d be at over £16m annually.
“That’s probably quadruple or more what they can expect under the current deal, and that’s before you get to other monetisable aspects of a direct-to-consumer service like that. But because they are only one of 42 shareholders in the SPFL, that won’t happen unless they threatened to break away – and then you have no one to play against, which shows why, in my opinion, the current distribution system is pretty fair.
“The middle ground would be to do what the Premier League is currently exploring and have an SPFL-wide direct-to-consumer platform. Then, you could let the market decide and test Rangers’ hypothesis that the rights are undervalued. In the long term, I have no doubt that is the play. But for now, selling the IP to Sky and Premier Sports is easy and risk-free.“
Rangers’ argument for voting against Sky Sports’ TV deal explained
The Ibrox outfit believed that Scotland could sell more matches and at a higher price, which would then benefit all clubs in the Scottish Premiership.
Their argument led to the comparison with the TV deal in Norway, given the scale of population and also the UEFA club association coefficients.
However, Williams explained why the rights in Scotland are not as valuable as those in Norway.
He continued: “On face value, I can see why you might compare the domestic TV deal in Norway with the SPFL’s. Scotland and Norway have similar populations, and there isn’t much between them in terms of their rankings in the UEFA club association coefficients, which we can use as a proxy for the quality of the – and I hate this term – product.
“However, if you look deeper, you start to see why Scotland’s rights are less valuable.
“The SPFL’s domestic TV rights are split between the £30m-a-season deal with Sky Sports and then a further 22-match deal with Premier Sport at about £3.2m, so the total value of the domestic broadcast rights is £33m. Or thereabouts, at least – the actual contracts will have lots of different variables that affect the final value of the deal, and the figures we see in the press are usually what the two sides of the negotiations think the deal will average out at.
“That’s for up to 82 matches. So you’re looking at a value of about £400,000 per game. In Norway, they are selling 240 games and the deal is worth around £55m, depending on the conversion rate. That’s about £250,000 per game. So on that metric, imperfect as it is, Scotland are ahead.
“Scotland could sell more matches and perhaps get a higher price. That was Rangers’ argument when they voted against the SPFL’s deal. And yes, I’m sure there were parties that were interested. However, having interested parties doesn’t always translate to a real offer in cold, hard cash.”
Williams believes that there are merits to continuing with Sky Sports as they provide stability and will not abruptly cut their longstanding agreements.
He also explained that, as there is more disposable income in Norway, the people there are willing to pay more for their football.
There is also an evenly distributed interest in the league there as it is not just dominated by two teams, as has been the case in Scotland.
Williams continued: “With Sky, you’re getting stability. They aren’t going to pull the rug, as we’ve seen with a fair few major broadcasting deals in European football in recent years. And if there was significant interest in the untelevised matches, that wouldn’t cannibalise in-person ticket sales; they’d have been sold.
“There’s more disposable income in Norway too. There is also perhaps a flatter, more evenly distributed interest in the Eliteserien because it’s not dominated by two teams. That means that including more matches in the rights package is actually valuable to the broadcaster, hence why they pay more.
“Clearly, they think £55m is commercially viable – and you can’t really argue against market forces in that regard. They also don’t have the Premier League on their doorstep, and consumers only have so many hours in a day to watch football. TV deals rely on casual fans, not diehards.“
