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Italian’s soccer shocker

Fans will have to watch matches on TV

For Rupert Murdoch and Silvio Berlusconi, two moguls who have built their media empires on the back of lucrative sports broadcasting contracts, last week’s decision to ban soccer fans from stadiums lacking proper security wasn’t all that bad.

Sure, airing soccer matches from empty stadiums hardly makes for compelling programming.

But since the games will go on, fans in this soccer-crazy nation will be forced to watch the matches on TV and that is good for the broadcasters.

Plus, when it comes time to negotiate new contracts, broadcasters might have the upper hand with the scandal-ridden sport.

The Italian government made the decision to ban fans Feb. 6 after spectators rioted Feb. 1 in the Sicilian city of Catania leading to the death of a policeman and injuries to several other people.

Only a few stadiums in Italy’s top two leagues — Serie A and Serie B — make the security grade, including Rome’s Olympic Stadium, Palermo’s Barbera Stadium, Turin’s Olympic Stadium and the Artemio Franchi Stadium in Siena.

For the rest, including Milan’s San Siro — home to Berlusconi’s AC Milan — fan attendance will be limited or excluded entirely.

Club owners and league officials promised to fight the decision. But it could have been worse.

In the days following the Catania riot, there were calls to cancel the season entirely.

As it stands now, just one weekend of matches was canceled, a move that sent rights holders Sky Italia and Mediaset scrambling to fill a gaping hole in their programming schedule.

It is estimated Sky Italia lost 600,000 viewers on the evening of Feb. 3 for its normally top-rated Sky Sport Sunday evening match.

Mediaset and Sky Italia, which shelled out a combined c500 million ($650 million) in TV rights for the season, were relieved the stoppage appears to be short.

Moreover, barring fans from stadiums in cities like Milan, Florence and Naples could boost pay TV viewership; all league matches are broadcast on premium channels.

Sky could see an increase in new subscriptions and Mediaset a spike in single-game broadcasts on its Mediaset Premium pay-per-view service, reasons GianPaolo Rivano. A fund manager for Milan-based asset management company Gesti-Re, which carries Mediaset in its portfolio of media stocks, Rivano isn’t concerned about the empty stadiums.

“Particularly for Mediaset, there could be a positive impact with single-game purchases. But I would say the bottom line impact would be small,” Rivano predicts.

More importantly for the broadcasters, he says, the fallout from the latest scandal could put further downward pressure on the price of the Serie A broadcast-rights package when it comes up for renegotiation, as expected, after the 2007-08 season.

“Going forward, I think the value of the rights could be lower than they were in the past,” he says.

Back-to-back scandals, including a match-fixing scandal that involved five Serie A clubs, could shave millions off the asking price, he adds.

Ironically, considering AC Milan is among the teams involved in the match-fixing, a continued ratings slide might validate Mediaset’s recent lawsuit against the league claiming the value of TV rights this season have fallen dramatically in the past year.

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