World Cup rights: Why not this route?

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By Michael Y.P. Ang

Will the 20th World Cup finals get blacked out in what is being touted as a global city – Singapore? Or will Singaporeans be forced to fork out an exorbitant amount of money to watch the planet’s most popular single-sport event? Unfortunately, Singaporeans are still left in the dark, even though it is less than four months before the sporting world lights up with June’s big kick-off in Brazil.

Singapore had found itself in a similar mess in 2010, when the previous World Cup finals were held. So why did the authorities allow this to happen again?

Most probably think that our Government has no influence over how FIFA decides to sell broadcast rights for its premier event. This, however, is untrue. Some countries have already adopted the “free-to-air only” model for World Cup broadcasts, essentially forcing FIFA to sell rights to free-to-air TV stations.

Worldwide satellite broadcasting of the World Cup finals began in 1966. Matches were shown on our national broadcaster until the 2002 finals. This decades-long tradition was broken in 2006, when MediaCorp stopped being on the ball, reducing itself to showing only four matches and allowing StarHub Cable to profit from telecasting the event.

This unhealthy practice continued in 2010, with SingTel mio TV joining its competitor StarHub in broadcasting World Cup matches. I call it “unhealthy” because World Cup matches are of national sporting interest to Singaporeans and should be broadcast on free-to-air channels.

Although Singapore’s national team has never qualified to play in the World Cup finals and is unlikely to do so for the foreseeable future, the event nevertheless generates nationwide interest every four years.

If the World Cup were not of national sporting interest, why has it been one of the few sporting events to be telecast live in Singapore every time it takes place, even though no Singapore team ever competes in it?

Britain’s way

The United Kingdom has made it illegal for FIFA to sell World Cup rights exclusively to British payFeTV operators. FIFA tried to fight this in court but lost, despite claiming that it could not sell the rights fairly for their real value.

The British Broadcasting Corporation reported last July that the European Court of Justice (ECJ) – Europe’s Supreme Court – has upheld a 2011 European General Court decision allowing the UK to keep the World Cup finals as a “protected” event of national sporting interest to be broadcast for free.

Note that FIFA was not disputing matches featuring British teams, nor the four key matches (opening game, semi-finals, and final), all of which would have been broadcast for free in the UK even if FIFA had won its case.

FIFA was arguing that matches without UK teams should not be shown for free in Britain because such a practice “interfered with their ability to sell television rights at the best commercial price they could get in the marketplace”.

However, the UK argued that all 64 matches were an important part of its national sporting “crown jewels” that must be “made available to the whole population to watch on terrestrial television”.

The ECJ agreed with the UK, saying that European Union countries possessed the right to choose broadcast events “which they deem to be of major importance for society” and show them for free. Belgium has also exercised that right.

The ECJ added that the World Cup finals “in their entirety, have always been very popular among the general public and not only viewers who generally follow football matches on television”.

FIFA boycott? Nah

The ECJ argument could easily be applied to Singapore, given the World Cup’s vast popularity among Singaporeans and immigrants in the country.

What about fears of sports TV rights holders boycotting Singapore altogether if our market is overly regulated? Those who voice such fears perhaps have little understanding of basic economics.

In an imperfect world, no seller will always get to maximise profits. Only gullible buyers allow this to happen. The British and Belgian cases prove that when sellers are unable to maximise profits, they live with the second-best outcome.

If the Government is concerned about Singapore’s relatively small market preventing MediaCorp from profiting through broadcasting World Cup matches and selling TV advertising spots, it should be comforted by the fact that Hong Kong, whose market size is not significantly larger than Singapore’s, will be showing the World Cup on its free-to-air channels.

If Hong Kong can do it, what is Singapore’s excuse?