Sports web nabs soccer games, launches channel
LONDON — At a time when many media combos are cutting back, Disney-owned sports web ESPN is bucking the trend in the U.K.In June, following several failed attempts, ESPN finally succeeded in buying a portfolio of 115 live English Premier League soccer games. Six weeks later the company launched a channel — called simply ESPN — to showcase the soccer. And on Aug. 15 ESPN aired its first match, in which London club Arsenal defeated north of England club Everton 6-1. “In order to jump in we had to move quickly,” says Russell Wolff, the New York-based executive VP and managing director of ESPN Intl. Wolff is a 13-year veteran of the sports cabler. He has overseen numerous channel launches around the globe including rolling out ESPN Classic Sport for European audiences in 2002. Seven years later the outfit claims that ESPN Classic Sport, boosted by dedicated French, Italian and English feeds, is available to more than 23 million households in 40 European countries. But, arguably, it is ESPN’s success in securing a piece of the English Premier League pie, paying an estimated £240 million (almost $400 million) for four packages of soccer games, that represents the real change in ESPN’s European game. Wolff, who has spent much of the summer in the U.K. overseeing the new kid on ESPN’s block, acknowledges the passion that Brits bring to Premier League soccer is uniquely intense. “Passionate fans lead to passionate TV watchers and passionate website users,” he says. With luck, this can be translated into a valuable revenue stream for Wolff’s business. If that happens, ESPN will succeed where the Irish pay TV company Setanta failed. ESPN acquired the Premier League soccer rights — some 46 games this season and 23 each for the following three seasons — when Setanta’s U.K. business collapsed June 23. Rather than emulating Setanta, which sold its channels directly to subscribers, competing head-on with the dominant market player, News Corp. satcaster BSkyB, ESPN has chosen a more cautious approach. It has effectively formed a partnership with BSkyB’s Sky Sports, which owns the rest of the Premiere League games. The new channel’s branding is ESPN through and through and it is fronted by a dedicated team of presenters. But BSkyB provides the live footage from the matches, sells advertising for the channel and handles subscriptions. “We think competition is healthy in any market, but at the same time our relationship with Sky is a complex one,” Wolff says. “We are relying on the Sky retail arm and so far they have been fantastic, but Sky Sports is also a competitor.” So can this “complementary but competitive” relationship succeed? The omens are good. ESPN already partners with News Corp.’s Star TV in a sports venture in Asia, ESPN Star Sports. Moreover Disney and News Corp.-owned Fox are stockholders in online video content site Hulu. In fact, provided enough people sign up — analysts reckon that between 1.5 million and 2 million subscribers should be enough to make a profit — both ESPN and the BSkyB should be happy. A recent report by investment bank Citigroup estimated that if ESPN gets 2 million subscribers, BSkyB would make $132.5 million a year. But Citigroup concluded that ESPN’s success (the channel has deals with pay TV platform Virgin Media and most of the other much smaller players) could be a double-edged sword for BSkyB. “If ESPN is really successful it may feel emboldened to extend its content acquisition strategy,” says the report. This could inflate the cost of sports rights and “pose a material challenge to Sky’s dominant position as an aggregator of premium sports content in the U.K.” That, however, is all in the future. For now ESPN needs to consolidate its position in the U.K. Aside from British soccer, ESPN offers top league soccer from the U.S., Germany, Italy, Holland and Russia and coverage of Major League Baseball and National Hockey League games. These air live in the early hours because of the time difference between the U.S. and U.K. It also is supported by two other channels, ESPN Classic and ESPN America, plus dedicated sports websites including Cricinfo covering cricket, Scrum.com for rugby, and Racing-Live.com for motor sports. As Wolff says, “We have been underdeveloped in Europe and the launch of ESPN in the U.K. is a key step in building our branded sports media presence around the world.”
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