With the FIFA World Cup, Afcon, Rugby World Cup, and Cricket World Cup scheduled for the next two years, sports fans are in for a real treat. But how can they watch coverage of their favourite sporting events? For those without pay TV in South Africa, this could be a major problem.
A furore erupted in October last year when trade union Cosatu threatened to protest outside a Rugby Championship clash between South Africa and New Zealand in Cape Town. They were fighting for rugby test matches to be televised live on SABC as, at that stage, this was only available to those with a DStv premium subscription. Matches were shown on SABC, but two hours after they had started.
Speaking to Ray White of 702 at the time, Cosatu Western Cape provincial secretary and city councillor, Tony Ehrenreich, expressed his frustration. “It is a national sport, and there is a great deal of public money going into rugby. Yet only an elite few benefit. These are contracts that deny our country their heritage and their right to enjoy their sports. Cosatu does not recognise the validity of these contracts. We will sabotage SuperSport and their future if they are sabotaging the interests of all South Africans.”
Ehrenreich, an experienced and vocal activist, said the world could not be led to believe rugby was “fair and equitable in South Africa when only 20% can see the match live. This is the problem with transformation in this country. It’s the elites both black and white … and we won’t accept the continuation of these exclusionary policies”.
While Cosatu canned its march at the last minute, this is an example of the major problem with sports broadcasting rights in South Africa; the majority of South Africa’s population does not have access to the coverage as it is mostly on pay TV platforms.
As Ehrenreich told The Media Online at the time, “The government and SARU agree all South Africans have the right to watch games live and that SuperSport must transfer the license. Unfortunately SuperSport walked out of the meeting. But 45 million South Africans must be able to watch national teams on TV in real time.”
Mark Rosin (left), chief operating officer of eMedia Investments (the company that owns e.tv and eNCA), believes sports of national interest, including Bafana Bafana, Banyana Banyana, the Springboks, and the Proteas, “should be readily available to all South Africans. The current television market, however, does not allow for this”.
But why is this the case?
The deepest pockets win the bids
The majority of sports broadcast rights of provincial, national and international interest are held by MultiChoice/DStv, on its SuperSport channels. Sports covered include soccer, rugby, motor racing, cricket, and less popular sports such as swimming, cycling and athletics. SuperSport is a juggernaut, both in terms of spending power and number of channels on which to showcase content. Bidding for exclusive sports broadcast rights is an important part of MultiChoice’s strategy, but it is also bolstered by international practice.
“It is an accepted principle by regulators globally that pay TV broadcasters require exclusivity to differentiate themselves from competitors as a basic business model, to recoup the investment they make into sports rights,” said MultiChoice (comment from individuals on specific questions was requested by The Media magazine, but the company chose to respond with a broad statement instead).
Sport is a hot commodity in South Africa. South Africans are passionate fans who enjoy and follow their teams, so it makes sense for broadcasters to want to have as much coverage as possible on their channels as it attracts massive numbers of viewers. But it is an expensive endeavour at the same time. When SuperSport won the South African PSL rights in 2011, out bidding the SABC, it paid R1.6 billion and when renewing in 2011, for five years from the 2012/13 season, the cost rose to over R2 billion. Another example of the massive costs of sports rights is how much SuperSport paid for the English Premier League (EPL) 2016 – 2019 seasons, back in late 2015. The broadcaster splashed out on a £296 million (R6 – 7 billion) price tag for the exclusive rights.
The reality, at present, is that realistically SuperSport is the only major broadcaster in South Africa with enough money to pay these costs. It’s no secret that the SABC is struggling financially, having posted a R977 million loss for the 2016/17 financial year, while Rosin describes the costs of acquiring live sport broadcast rights as “exorbitant”.
But it is not only costs that are a hindrance to acquiring sports rights. Most agreements require that a broadcaster show every match/event of a tournament or league. They cannot pick and choose only a certain number to show. With SABC only having three channels and eMedia Investments limited to two (if you include eNCA, which is unlikely to show live sport), SuperSport is the only broadcaster with enough capacity to realistically fulfil these agreements. At the time of writing, it has 16 channels on the DStv platform dedicated to sport. Its ability to also have pop-up channels, dedicated to specific tournaments and/or leagues, is another major advantage.
No sports rights for e.tv
Gone are the days where families gathered in the living room on a Wednesday or Thursday evening to watch UEFA Champions League games on e.tv. In fact eMedia Investments does not own any sports broadcast rights at present.
“When we do broadcast sport, it’s on an ad hoc basis on e.tv. Reasons for this include the exorbitant costs of acquiring live broadcast rights and the dominance of DStv in this area. They use live sports broadcasts to increase and maintain their subscriber base,” explains Rosin.
Another major loss for the group (though some people won’t consider this a sport in the traditional sense of the word), is professional wrestling programming from the World Wrestling Entertainment (WWE) company. This was a cornerstone of e.tv’s line-up for many years, drawing a large number of viewers, before the rights were scooped up by SuperSport in the middle of 2017.
Since then the new content has been heavily promoted across all of SuperSport’s channels. Another change, which is great news for wrestling fans, is that SuperSport shows the entire three hours of each weekly event, rather than the one hour highlights which viewers were accustomed to on e.tv. Again, since SuperSport has more capacity, they are able to broadcast the long-form content, rather than simply highlights.
Even though it has no sports rights currently, eMedia Investments is always on the lookout for opportunities in this programming space. “eMedia Investments would be interested in broadcasting sporting events should it appeal to our audience and be financially viable,” says Rosin. “In making this decision, a privately-owned broadcaster always has to balance the cost of a broadcast (in this case the extremely high rights costs) and the impact of the broadcast on audience figures with the ability to recoup these costs. For e.tv, we can only recoup the costs through advertising. A pay TV operator can recoup costs through subscription fees and advertising.”
A changing landscape
Even though people have bemoaned the lack of sports coverage on free-to-air (FTA) broadcasters, MultiChoice is adamant that the landscape is changing.
“Although SuperSport has a number of rights in its stable, the sports rights market in South Africa is changing rapidly and is more competitive than ever,” the company says. “All rights to sport are open to anyone to bid and all broadcasters (including FTA operators) are free to tender or negotiate for the rights with rights holders. Operators such as Kwese and StarTimes compete for rights vigorously. SuperSport has lost many sets of rights to these competitors recently, such as athletics, the US NBA, tennis and Mixed Martial Arts (MMA), as well as German, Italian, French and UEFA qualifiers football.”
The group is also adamant that there are plenty of opportunities for South Africans without access to pay TV platforms to watch sports. “Our sports broadcast rights regulations ensure that sporting events of national interest, such as matches played by South African national teams locally and international competitions such as World Cups and the Olympics, are made available to free-to-air broadcasters. Federations such as the PSL also insist that a large number of their matches appear on FTA,” MultiChoice adds.
An example of this was seen recently with SABC securing the rights for the 2018 Super Rugby season for inbound and outbound live matches on its radio stations. The main rights holder, SuperSport, waived the broadcast right fees for this coverage, essentially handing content to SABC for free. The SABC said budget constraints were the reason for not being able to pay SuperSport for the rights, while SA Rugby had intervened to ensure its content would be available on SABC radio stations.
As South Africa’s public broadcaster, the SABC is mandated by regulations to cover certain tournaments/leagues/competitions identified as national sporting events. These include, but are not limited to, the FIFA World Cup, IRB Rugby World Cup, ICC Cricket World Cup, the African Cup of Nations, the Commonwealth Games, the Olympic Games, the All Africa Games, the CAF Champions League Final, the Mandela Cup Final (if a South African team is involved), and the Rugby Super 12 final (if a South African team is involved).
Competition from non-traditional broadcasters
A growing trend, which will be a must-watch in the future for traditional broadcasters, is competition from global internet giants in the sports broadcast space. The likes of Amazon, Facebook, YouTube, Google, Twitter and others are the new frontier and are now beginning to actively challenge for sports rights worldwide, including in South Africa.
MultiChoice identified several advantages that they have over traditional broadcasters, which makes their threat that much more serious. “These operators have no regulations that they have to comply with and far fewer expenses than pay TV and FTA broadcasters. They employ far fewer people and do not pay taxes locally,” it says. “They are able to acquire rights globally and easily attain economies of scale. These factors pose a significant risk to traditional broadcasters and this has already resulted in the sports rights landscape experiencing a substantial change throughout the world. This change will continue to accelerate.”
Rosin also identified this threat, but takes a more conservative view. “Over the top (OTT) broadcasts are starting to make inroads in the live broadcast of some non-traditional sporting events, but still lag far behind in terms of drawcard live sporting events. This will no doubt start changing as these players have more money to spend on rights acquisitions and it will begin to play out in South Africa over the next decade,” he reckons.
While it seems efforts are being made to bring sports coverage to more South Africans, the dire financial state of the SABC, the disinclination of e.tv to spend, and the dominance of SuperSport are all obstacles that still need to be overcome. The introduction of digital terrestrial television (DTT) could level the playing field more as more channels for broadcasters could bring more platforms and money to cover sport. Alternative channels, such as social media, are another emerging option for South Africans to get their sports fix. But despite all this uncertainty and complications, there is one undeniable fact: Sport is big business and South Africans really are sports mad!
Michael Bratt is a multimedia journalist at Wag the Dog, publishers of The Media Online and The Media. Follow him on Twitter @MichaelBratt8
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