In today’s modern
“professional era” of sport, it is accepted that sport and the media go hand in
hand. While there remains a “grassroots” level of sport, separate from the
media environment, the world of sport is dominated and in many ways controlled
by the media. In countries such as New Zealand, with Rugby Unions struggling
financially, sport depends on the lucrative financial offerings the media
offers through things like broadcasting rights in order to survive.
Traditionally, issues of sport and the media are analyzed from this
perspective, the role the media plays in the professionalization of sport and
how sport has changed, for better or worse, as a result. Little attention
however is given to the other side of the equation, it is easy to comprehend
why sport has aligned itself with media outlets over time, the benefits are
exhibited to us almost any time we turn on our television, but what do the
media outlets gain from this? In this essay I will attempt to shed some light
on this perspective by exploring the way the media, in particular News
Corporation, has turned sport into one of the building blocks of its media
empire, showing just how vast the organizations reach into sport extends. Then
I will illustrate two examples, one of failure and one of immense success,
which show just how valuable sport is to media outlets and why the topic of
sport and media demands further attention in the media studies field.
The media and sport
have a long, mutually beneficial relationship. The yellow jersey worn by the
leader of the Tour de France is in recognition of the yellow tinted paper the French
paper L’Auto was printed on. In 1908,
L’Auto, struggling to compete against the opposing Le Vélo, concocted the idea of a race around France to boost
circulation. The race, dubbed The Tour de France “proved a success for the
newspaper; circulation leapt from 25,000 before the 1903 Tour to 65,000 after
it; in 1908 the race boosted circulation past a quarter of a million, and
during the 1923 Tour it was selling 500,000 copies a day” (Mishra 2010)
demonstrating one of the earliest examples of the substantially lucrative bond
between media and sport. Advancing to more modern times “According to
research by A.T. Kearney, the worldwide sports market was worth $64 billion USD
in 2009 (Zygband & Collignon 2011). The research “finds that the global
sports industry is growing much faster than national gross domestic product
(GDP) rates around the world”. Despite this however, the world of sports media
seems somewhat ignored or taken lightly in the media studies literature “Sports
journalism is an increasingly significant feature of the press yet is subject
to considerable criticism, as summarized by the familiar jibe that it is the
‘toy department of the news media’ (Rowe 2007). As a result of this approach,
the power of sports within the media environment is often not afforded the
consideration it demands. Of course, we are not starved for sport in our
regular media serving, far from it particularly in sports mad countries such as
New Zealand, but what is behind the sports broadcasting remains woefully
unexplored. New Zealand provides a prime example of the issues sport and the
media create within a political economy context. Much is made of the effective
monopoly Sky holds over the New Zealand pay Television market, and it is
through holding the broadcasting rights to sport, particularly Rugby, that this
is achieved. Of Sky’s 846, 931, as of the 30th of June 2012, which
equates to roughly half of the households in New Zealand, 76% were subscribed
to the sports package (Sky Annual Report 2012). Without the rights to sport,
the Pay Television landscape in New Zealand is nigh on impossible for a
competitor to enter which forges the effective monopoly. Rugby in itself is a
monopoly, there is only one “Rugby” to go around, there is only one Super Rugby,
there is only one Tri Nations and thus controlling the broadcasting of Rugby
allows for this monopolization to occur. Indeed for all of the flak that Sky
takes for its control of the Pay Television market, any entity that somehow
managed to outbid Sky for the rights to the most prized sports in the country
would likely then be in control of said monopoly themselves. In 1995, Rugby
entered the professional era, the Rugby Unions of South Africa, New Zealand and
Australia tasked with finding a way to meet player salary demands “sold their
test match television rights to Rupert Murdoch’s News Corporation” (Hope 2002
pg. 236), the rights for what we have now come to know as the “Tri Nations” and
“Super Rugby” competitions were subsequently sold on to the pay Television
network Sky with Television New Zealand having “nowhere near the resources
required to mount a competitive bid” (Hope 2002 pg. 247). In 1997, News
Corporation proceeded to purchase a 48 percent stake in Sky. This is all very
much by design and is not an example exclusive to the New Zealand environment,
rather, it is part of the blue print of Pay Television success laid out by
Murdoch himself, as Craig Robertson (2004 pg. 293) quotes Murdoch, speaking to
the 1996 annual News Corporation meeting “sport “absolutely overpowers” film
and all other forms of entertainment in drawing viewers to television,
especially pay television” adding that “We have the long term rights in most
countries to major sporting events, and we will be doing in Asia what we intend
to do elsewhere in the world – that is use sports as a battering ram and a lead
offering in all our pay-television operations”. This battering ram approach can
often be seen in the advertising of Sky in New Zealand where access to sport,
primarily the All Blacks, is the major point of focus, often leading to special
offers of a period of time in which new subscribers will have access to the
sports package for free. McKay and Rowe (1997 pg.69-70) suggest “there is no
one in the media world who has a greater commitment to the commercial
exploitation of TV sport than Murdoch”, controlling or part owning the TV
rights “British and “Euro” soccer, rugby league, rugby union, West Indian and
Pakistani cricket, and American football via British-based Fox-tel (40 percent
Murdoch-owned); premier league soccer, boxing, rugby league, rugby union,
cricket, racing, major tennis events, American football, and British and
American basketball via British-based BSkyB (40 percent Murdoch-owned);
American football via German-based Vox (49.9 percent Murdoch-owned); golf,
tennis, Australian-rules football, rugby union, motor racing, and the 1996 and
2000 Olympics via Australian-based Channel Seven (15 percent Murdoch-owned);
and Chinese soccer, badminton, Japanese baseball, cricket, World Cup soccer,
motor-cycling, motor racing, rugby union, tennis, and table tennis via Hong
Kong-based Star TV (64 percent Murdoch-owned). In America, Murdoch’s Fox Sports
includes the rights to the MLB World Series, the NFL playoffs and the Super
Bowl, but what is more impressive, as Marc Gunther (1998) explains, “is the way
Fox became the dominant player in local sports, by accumulating stakes in 22
regional sports networks that collectively own the local TV rights to 70 of 76
Major League Baseball, NBA and NHL teams... They stitched together enough
regional sports channels to create a national network, built around home-team
loyalties”. In this endeavour to control the local sports market, Fox
encountered a problem in Detroit where regional sports channel PASS refused to
sell “So the Fox team called a trick play—they outbid the Post Co. For the
cable rights to the Stanley Cup champion Detroit Red wings and the NBA’s
Detroit Pistons, elbowing PASS off the field” (Gunther 1998). In refusing to sell
to Fox they still owned the channel, but subsequently had no sports to offer,
which in turn lead to them selling out to Fox at an even cheaper price. Murdoch
paid $311 million to purchase the Los Angeles Dodgers baseball team due to the
Dodgers being “all but essential for Fox’s Southern California sports networks”
(Gunther 1998), thus giving Fox “a voice in deciding where the Lakers, Kings,
Knicks, and Rangers are seen too, virtually ensuring that they won’t show up on
a competitor”, the significance of those particular teams being they are based
in either Los Angeles or New York, the biggest media markets. While Murdoch is
no stranger to lists of the most powerful people in the world, in 1996 “he
became the first person to top the Sporting News’ list of the one hundred most
powerful people in sport for two consecutive years” (McKay & Rowe 1997 pg.
70). Sport provides a cost effective way for networks to fill air time while
reaching customers in hard to reach demographics like young males, it also stands
tall against the modern threats to television in piracy and time shifting. The
“live” nature of sport means people are much less inclined to download or
record a sporting event to watch at a later date. With sports undeniable
popularity and its resistance to such threats, it is easy to understand why
Murdoch sees sport as part of the foundation of his media empire and thus why
we need to investigate these issues further so we can better understand these
attempts of exploitation.
Having established the
clear value attributed to sports media by Murdoch and the position of sport
within the media landscape, I now turn attention to two of the biggest debacles
that have occurred as a result of Murdoch’s efforts to obtain the sporting
rights he desires to power his television networks. “With the introduction of
digital television in Europe, the preexisinting pay-television monopolies, like
BSkyB, faced a more competitive market” (Robertson 2004 pg. 293) the solution,
as Robertson explains, was exclusive football rights “perceived as critical to
re-establishing near monopolies in a digital television market”. With ONdigital
entering the digital cable market, BSkyB faced a risk in the form of
competition “with sufficient financial resources to outbid BSkyB for exclusive
football rights when its present contract expired” (Robertson 2004 pg. 297).
Tasked with finding a solution to counter this potential threat, News
Corporation attempted to purchase the world famous Manchester United Football
Club with an offer “a 51 percent premium over the club’s stock price”
(Robertson 2004 pg. 293). With control over the biggest and most profitable
Football club in England, News Corporation would have obtained a very
influential voice when it came time to negotiate contracts for broadcasting
rights of Premier League football and even if those rights were to be broken up
and negotiated on a team by team basis, they would be in control of the star
team in the country. However, “To the surprise of sports fans, politicians and
shareholders alike” (Larsen, Grice 1999) the 623 million pound bid was blocked
by the Monopolies and Mergers Commission ruling it anti- competitive, “saying
it would have an adverse effect on the wider football industry” and that “Under
almost all scenarios considered by the MMC, the merger would increase the
market power which BSkyB already has as a provider of sports premium channels”
(Larsen, Grice 1999) this despite guarantees from both BSkyB and Manchester
United “that sensitive information regarding television rights would not be
exchanged during future negotiations with the Premier League” (Robertson 2004
pg. 304). This decision carried with it several political implications, further
emphasising the importance of sports and media. The new Labour government in
England had identified Football as its way to show commitment to community and
had established the “Football Task Force to investigate the sport at its
grassroots level and to assess the loss of community in football” (Robertson
2004 pg. 305), making the bid “an important test of its commitment to be the
government of the community and its construction of football as a
community/working-class institution”.
Furthermore, the bid tested this commitment in the battle between “the
power of the nation-state over a global media operation” (Robertson 2004 pg.
205) after Murdoch had enjoyed a close relationship with past Labour
governments, with his Sun newspaper endorsing Labour in the 1997 election and
Labour dropping proposed tougher laws on cross-media ownership and employment
rights.
“With the advent of pay
TV in Australia in 19995, competition for the broadcasting rights to sport
intensified in the drive to develop a viable subscriber base” (McGaughey &
Liesch 2002 pg. 386-387), and News Corporation attempted to obtain the rights
to Rugby League in Australia to build its Foxtel subscription base upon.
However, they encountered a problem in the form of another Australian born
media giant Kerry Packer and Optus Vision who had already obtained the free to
air and Pay Television broadcast rights to Rugby League’s national competition.
In what McGaughey and Liesch deem “one of the more recent and dramatic examples
of illustrating the commercial power of and potential dissension in the
sports-media nexus” (2002 pg. 386) Murdoch sought to manoeuvre a way around
Packer’s refusal to give up the rights he so desperately craved as “due to the
game’s wide popular appeal in Australia it would have been very difficult for
either to achieve significant enough subscriptions for a pay-TV network to
survive without it” (Falcous 1998) particularly in the traditionally League
oriented Sydney and Brisbane markets. Foxtel’s solution was to create an
entirely new competition to compete against the existing ARL, known as “Super
League”, with the ensuing debacle dubbed the “Super League War”. News Limited
“invested $350 million in 1995 buying players and officials, purchasing and
privatizing clubs (or franchises as they became known), and selling the rebel
competition to the press, sponsors, and the public” (Phillips & Hutchins
2003 pg. 223) creating an extreme monopolistic situation in which, as Phillips
and Hutchins (2003 pg. 224) quote Inside
Sport “Murdoch owns the players that make up the Murdoch teams that make up
the Murdoch-sponsored league that play the matches that feed the Murdoch TV
networks that sell the Murdoch products that are endorsed by the Murdoch
[news]papers” explaining the true reach of Murdoch’s empire. The true value of
obtaining the rights to Rugby League is put further in perspective by Hutchins
(1996 pg. 152) “The Foxtel-Optus Vision battle for dominance in the fledgling
Australian pay TV market has been the most costly ever in the Australian media
industry, and possibly any other industry. The accumulated losses of Foxtel and
Optus currently stand at an astonishing $330.1 million, having only secured
between 100 000 to 115 000 subscribers each” emphasised by Phillips and
Hutchins (2003 pg. 224) “more money was spent competing for Rugby League than
the accumulated income of the game from gate receipts, sponsorship,
merchandising, legal gambling, television, and radio broadcast fees since its
establishment in 1907”. As Hutchins (1996 pg. 152) explains however, “This
level of competition is not simply a programming matter – it is about strategic
position for profit-generating technologies accessible through pay television
hook-ups. Pay technology allows heavy penetration of the lucrative multimedia,
long-distance telephony markets, and new interactive services coming on-line”.
Thus while the purchasing of these rights may cause a heavy financial blow
initially, the plan is to build a core of subscribers to your network who will
proceed to spend further money through News Corps future offerings, spread
across many outlets, sport is the lure with which said subscribers are caught.
The Super League and ARL operated in competition for one season before player
contract issues and protests and slumping audience numbers forced a
reconsideration and subsequent merger between the two parties creating the NRL.
After coming on to the scene with nothing, News Corp successfully navigated
their way into obtaining “50% control of the NRL while retaining partial
ownership in several clubs, secured broadcasting rights for 25 years for its
pay television station –Foxtel—and through ownership and partial ownership of
other commercial companies, provided money and sponsorship for former Super
League clubs and the reunited competition” (Phillips & Hutchins 2003 pg.
225). News Limited also maintained complete ownership of its own club the
Melbourne Storm, who many years down the track were part of the salary cap
scandal which saw the organization stripped of several championships on account
of paying its players above the total amount of salary the NRL rules mandate.
“Through its partial ownership of Foxtel and other businesses, News Limited had
consumed or partially consumed all parts of the sport: the administration of
the sport, the media organization televising the sport, and the companies sponsoring
the sport” (Phillips & Hutchins 2003 pg. 225).
While much of the focus
in media studies literature revolves around Murdoch’s overall ownership across
the various media platforms, his control of sports broadcasting as an admitted
integral part of the News Corp organizational framework receives little
attention. The Sports industry is an extremely lucrative business which Murdoch
exploits yet these actions seem to often fly under the radar. The results are
easy to see, and in situations like New Zealand have an effect on all of us who
watch Television and arguably on the Medias position within the democratic
environment. The examples of the Manchester United bid and the bullying tactics
in Australia reveal the crafty and incredibly expensive lengths in which
Murdoch will go to in order to maintain his grip on sport. If the man himself
acknowledges that sport “absolutely overpowers” all forms of entertainment in
attracting Television viewers, perhaps we as those studying the media should
take heed of what Murdoch has known all along, shed our preconceived notions of
what sports media is and explore what Murdoch considers it to be. Not as merely
a way to “entertain” the masses, but as a powerful tool of media ownership and
to lure in fans, better known to the media outlets as “customers”.
