ESPN’s move and global branding

By: j | January 14th, 2009

As reported earlier, American media mogul is preparing its volley into the English Premier League. The potential bidding war could be the saving financial grace of many clubs should Walt Disney Co.’s ESPN TV network challenge of Sky Broadcasting Group Plc and Setanta Sports Ltd. for the the rights to broadcast English Premier League matches live elevate the present £1.7b three-year deal. At present roughly fifty per-cent of all revenue for Premier League teams is derived from broadcasting and therefore a bidding war in conjunction with collapsing revenues in other streams could be the revenue boost many clubs desperately need. Equally and this should be stressed heavily, it will impact upon the positioning of clubs, sponsorship deals and business associations as the global brand expands heavily into the United States.

With tenders due on the six packages for the 2010 to 2013 seasons Setanta and Sky are now jockeying for position in a very turbulent economic climate. Setanta’s director of corporate development Richard Brooke has stated to the London Times in November that the company in an effort to renew its rights, would raise cash from shareholders. However in this financial environment, such an extensive offer might be a challenge and Disney’s ESPN could profit.

Dresdner Kleinwort media analyst Omar Sheik said to Bloomberg:

“A potential bid by ESPN is in particular dangerous for Setanta. Setanta’s soccer offering would become less attractive for viewers if they lose even one of their two packages.”

In previous broadcast bids, Disney has made it a habit of crushing their competition and are unlikely to come “light” to the table. With this knowledge both Sky Broadcasting Group Plc and Setanta Sports will need to come with highly attractive offers, particular the Ireland’s Setanta who Disney will go on the attack against as it also looks to rip into its Rubgy broadcasting (both Rugby and Cricket are next on the Disney’s internal list). Naturally if their attempt is successful, Disney ESPN will then launch a new channel into the UK market to assist its marketing efforts but equally continue to expand it delivery of Football within the United States heavily. This process has been going on for quite some time as it has strategically placed a greater amount of content in its broadcasts. Last years promotion of Cristiano Ronaldo at their “ESPY” award shows and “CR7″ new alliances with a Los Angeles based publicity team was no coincidence and part of the “inner circle’s” knowledge of things to come.

This has a telling impact on the entire series of events with Man City, not only with their apparent £100m offer for AC Milan’s Kaká, who is one of the most marketable images in all of sport and suits Disney’s vision to perfection but equally the well-placed positioning of ex-Nike man Gary Cook when he assumed the mantle as Chief executive of Man City. Along with his former employers recent £285 acquisition of Umbro that needed approval by the FA, this and other deals, including the development of the Three Lions academy are part of a massive business battleground being played out in the public forum. For Football fans, this might glaze over a bit as assume how great it is to see David Beckham at AC and assume it is for sporting reasons but this is a well-financed business battle between broadcasting moguls and Adidas and Nike going toe to toe.

And you thought this was a simple round ball.