Formula won 

29 July 2011

Aside from those wanting Rupert Murdoch’s influence to be curtailed, the News Corporation phone hacking saga so far hasn’t been bad news for BSkyB either, despite the fact that it’s likely to have had a not insignificant part to play in the scandal.

The prolonged nature of the phone hacking inquiry will at least help to delay any full blown investigation into the dominance of BSkyB as a pay-TV broadcaster, even if it’s inevitable that BSkyB will be dragged into the subsequent investigation by virtue of being closely linked to the Murdochs as well as being the target of a News Corp takeover.

(Keeping James Murdoch as chairman of BSkyB despite mounting claims of his involvement in the scandal could illustrate either supreme arrogance or a desperate bid to avoid losing face by the BSkyB board.)

Indeed whilst politicians get overheated by the exposed antics of tabloid newspapers, BSkyB has been quietly left to its own devices, striking a joint deal with the BBC for Formula 1 motor racing coverage as well as announcing pre-tax profits of £1bn.

Until recently a pay-TV Formula 1 deal was thought to be very unlikely because of an established ethos of using free-to-air television as a promotional means for car manufacturers and race sponsors along with numerous existing sponsor contracts stipulating the very same conditions, hence some free-to-air coverage being mandatory.

(Some of the F1 teams are now querying the terms of this new deal because it could affect the amount of exposure it gives to their sponsors.)

It has been claimed that BSkyB itself wasn’t involved in the Formula 1 negotiations until a very late stage, but that technicality in itself glosses over the earlier involvement of, yes you’ve guessed it, the Murdochs in securing such an important deal for Sky.

A great deal of BSkyB’s prior success had been due to a certain Rupert Murdoch pulling strings behind the scenes to make things happen for the satellite broadcaster – namely creating new opportunities – but with Murdoch’s image getting more tarnished by the day, such benefits could be harder to come by in the future.

Having said that, BSkyB nowadays can more than look after itself due to its size and prominence with or without the involvement of the Murdochs, and Formula 1 is one of the last remaining sports to have escaped the involvement of pay-TV to such an extent, therefore by default Formula 1 might turn out to be Rupert Murdoch’s last hurrah.

Of course there are two sides to this argument; the BBC clearly hasn’t got the resources – especially the number of TV channels – to provide the kind of sports coverage that BSkyB in particular is capable of doing and that many viewers tend to expect nowadays, even if live video streaming online could be used to fill in the gaps.

(Although other free-to-air broadcasters like ITV and Channel 4 could have struck a similar joint coverage deal with the BBC.)

Not to mention any arguments as to whether or not a licence fee-funded broadcaster should nowadays involve itself too closely with a sport which isn’t that environmentally friendly; apart from the actual race itself, it’s the wholesale movement of racing teams and their equipment to various race track locations that has a significant carbon footprint.

Plus the BBC in particular shouldn’t be held to ransom by the financial demands of large sporting bodies, although the very existence of BSkyB itself as a wealthy pay-TV monopoly has helped to raise such demands to levels that the BBC in particular now finds to be virtually untenable for most sporting events.

If BSkyB happens to be the only broadcaster that can comprehensively cover a wide range of sporting events by virtue of its size, then that itself is a monopoly of a particular aspect of broadcasting, therefore it’s surely a matter of time before such a monopoly faces a serious challenge, especially with Rupert Murdoch becoming less influential.

Such dominance had created the runaway success of BSkyB, which some claim was necessary in order to make it a success story as well as improving certain aspects of sports coverage in the process, but now this monopoly threatens to eliminate the competition altogether, especially if the TV licence fee can be suitably undermined.

It’s primarily through the growth of sports coverage – Premiership football in particular – that enabled BSkyB to build its empire, and has in turn removed many of the sporting events from free-to-air television coverage that had previously helped to justify the licence fee for a cross section of viewers.

Of course there will be more awkward but very important questions to be asked at some point, notably to what extent any anti-BBC sentiment that caused the recent licence fee freeze was influenced by the Murdochs (read: extremely likely), but the new Formula 1 deal is just one example of the consequential damage that results from such an action.

The BBC may be undoubtedly pleased that it has retained some F1 coverage but inevitably this has come at a further price in terms of justifying the licence fee and encouraging Sky’s sporting dominance in the process, but all may not be lost if you want to watch more Formula 1 racing without paying more money for a Sky subscription.

Given the free-to-air heritage of Formula 1 coverage in particular, odds-on that there’s still a free-to-air TV channel somewhere in Europe that will be showing a particular race, therefore sales of larger satellite TV dishes to pubs may flourish as a consequence as well as further encouraging sports fans to turn to live internet video streaming.

This state of affairs probably won’t change unless future deals further restrict the availability of Formula 1 coverage in other countries, therefore in respect to BSkyB it could be a case of “Be careful what you wish for”.

A Transdiffusion Presentation

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