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Premier League rights battle between Sky and BT harming UK TV industry
Deloitte report warns deals such as £5.14bn spent on football rights mask ‘worrying’ decline in original UK programming
Deloitte says the £36m Manchester United spent on Anthony Martial could have funded a BBC series like Wolf Hall five times over.
Friday 18 September 2015 13.12 BST Last modified on Friday 18 September 2015 17.35 BST
Britain’s television industry is being undermined by the huge sums spent on sports broadcasting, a new report has warned.
A recent bidding war between BT and Sky saw the rights to football’s Premier League sold for £5.14bn, or more than £10m a game.
But while the investment in sports helped boost the UK’s TV economy to £13bn last year, analysts said it masked a “worrying” decline in original UK programming.
The warning – contained in a report by consultancy firm Deloitte – comes shortly after BBC director general Tony Hall warned industry executives of a “long-term decline in the amount of UK originated content”.
Despite recent British success stories such as BBC drama Wolf Hall and the global popularity of the Bake Off brand, experts fear the UK’s creative sector may soon struggle to compete with US channels and online services such as Netflix.
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Deloitte also warned that two thirds of the UK’s independent production sector is now owned by overseas investors who are “taking profits out of the UK and into foreign pockets”.
Although British companies have welcomed the extra boost to their coffers from US media conglomerates, the report warned it could become a “poisoned chalice”.
It said: “How long these companies can remain creatively independent whilst being financially reliant remains to be seen.”
The report stated that overall, the UK’s television sector grew by 10% between 2012 and 2014, to £13bn.
However, much of this was was accounted for by a £400m-per-year growth in sports rights expenditure over the same period.
Deloitte said: “We quickly see that growth in the TV sector is far more anaemic if we subtract £400m a year; imagine the possible alternative uses of such spend.
“The £36m paid by Manchester United recently for the teenage Anthony Martial could have funded even a lavishly-budgeted BBC series like Wolf Hall five times over.”
It added: “In essence, the rising spend in sports rights is increasingly crowding out spend on original UK programming … what one sees is a hollowing out of the creative sector. Rather than enriching the industry, such actions may actually emaciate it.”
Since it entered the sports broadcasting market, BT has spent almost £2bn on acquiring football rights to show all Uefa Champions League games starting this year and 42 Premier League games from next season.
However, BT TV and Sport’s managing director Delia Bushell recently told the Guardian Edinburgh International TV Festival that she turned down the chance to bid for a show featuring former Top Gear presenters Jeremy Clarkson, Richard Hammond and James May.
The show – which according to a recent trademark application could be called Gear Knobs – was eventually bought by American company Amazon.
Speaking at the Royal Television Society conference in Cambridge this week, Lord Hall warned that the rise of US rivals could threaten the British creative sector over time.
Deloitte said that subscription funded digital platforms such as Netflix generated £317 million in the UK last year, up from £62 million in 2012.
Announcing a new BBC paid-for equivalent of the iPlayer to compete for American viewers, Lord Hall warned: “There is a long-term decline in the amount of UK-originated content. Will Netflix or Amazon make the range and volume of British programmes to make up the difference?
“Will they make the British programmes that aren’t being made? But my point is that these new businesses are unlikely to address the decline in original content for the UK.”
Deloitte said the amount spent on original UK commissions only increased 0.5% a year on average between 2010 and 2015, a reduction in real terms.
It said the amount spent on flagship shows had increased as channels look for “the next big thing”, but warned: “In general production budgets in the UK are declining in real terms, falling 2.6% on average in the last year.”
The report said there continues to be a “strong international appetite for British content”.
But as US companies continue to buy UK producers, it warned: “Global integration offers much opportunity for British production companies, but there may be a danger that it could also dilute or erode the individuality and independence that has been the key to its historic success.”
(http://www.theguardian.com/media/2015/sep/18/premier-league-rights-battle-between-sky-and-bt-harming-uk-tv-industry)
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