This tweet yesterday was sent with tongue firmly in cheek. But there's a serious issue underlying it, so, for insomniacs, a short thread about the financial implications for sports broadcasters of the coronavirus pandemic. 1/n
I'll use UK-centric examples here but use common sense to apply same principles to all broadcasters of all sports. Sky & BT's public position now is 'no refunds' because events so far are merely postponed, hence hypothetically will be delivered, sometime. 2/n
Things *do* change quite dramatically if events get cancelled outright. Broadcasters have then sold a proposition they won't ever deliver. Perhaps months of sports channels meant to be packed with live sport, carrying none. 3/n
Purely for illustrative purposes (and not cos it's going to happen, necessarily), let's say Premier League ends with no more games screened this season by Sky or BT. They'll have a contractual claim against PL for not delivering paid-for goods (games). 4/n
We can quantify this claim, based on what Sky (£11.625m per PL live game) and BT (£6.25m per live PL game) have paid for rights this season. Cutting a long story short, between them they have *roughly* £480m worth of 2019-20 PL games unplayed ATM. 5/n
If you're still awake, well done.
If not, good morning.
6/n
If not, good morning.
6/n
Fortunately for Sky and BT, the Premier League has indemnity insurance for situations like this (small print details unknown) but, again to grossly simplify, insurance will (to a big extent) reimburse the broadcasters. 7/n
It's potentially way, way, way more complex and a whole range of "goodwill" options are available so the PL and broadcasters might agree instead of straight compo to do favourable future deals. But ... 8/n
Theoretically at least, sports broadcasters such as Sky and BT could indeed end up with cash compensation for some (if not all) content paid for but not delivered. At which point they might use to placate customers. 9/n
These businesses (Sky, BT and the rest, worldwide) want to keep customers, not having millions of cord-cutters if there are 2-3-4 months of zero live premium sport. So being nice to customers is pragmatism. 10/n
So to end where we started, I *don't* in fact think it's only a matter of time before Sky and Bt suspend taking subscription cash. But maybe, sometime, they'll throw their customers a bone. A few quid off maybe. 11/n
Anyway, I wrote a story about this for the MoS, which is probably shorter in words and less detailed than this thread. It's here: mailonsunday.co.uk/sport/sportsne…
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