SPORT BROADCASTING ON SABC PLATFORMS

PRESENTATION TO THE PORTFOLIO COMMITTEE ON SPORT PRESENTED BY MR. R. NICHOLSON

22/02/11

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VISION

A world class, sport based content and production broadcaster

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MISSION

To be at the forefront of innovative, quality, viewer-

centric, efficient, nation building sport content broadcasting.

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WHAT IS DRIVING THE COST OF RIGHTS

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THE GLOBAL TREND

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HOW HAS THE PLAYING FIELD CHANGED

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(calculations based on a sample of countries and not total TV universe)

THE GLOBAL TREND

The number of new broadcasters worldwide, has increased competition for “good sport content”, whilst the amount of “good sport content” available to buy has remained same.

This has created a serious scarcity, driving the price of sport content up at the rapid rate we are currently seeing.

In South Africa alone the introduction of Supersport and Etv created a major paradigm shift.

The SABC found itself no longer in the driving seat for sports rights, the addition of TopTV has potential to worsen the situation.

Federations were now able to pit broadcasters up against each other to solicit the highest price

The price of rights is well above its market value.

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THE SABC’S INFLUENCING FACTORS

The Regulations detail out a criteria in Clause 4(1) for identifying National Sporting Events of Public Interest as follows: 2.1 (a) A confederation sporting event involving a national team or an individual; (b) A semi-final and final of a national knockout competition; Or (c) An opening game, semi-final and final of a confederation sporting event.

2.2 The Regulations also lists National Sporting Events using the above criteria.

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SOME OF THE LISTED EVENTS

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Summer Olympics Paralympics All Africa Games

Commonwealth Games

FIFA World Cup Africa Cup of Nations

IRB Rugby World Cup ICC Cricket World Cup ICC T20 Cricket World Championships

Comrades Marathon Two Oceans Marathon Super 15 Rugby

COSAFA Cup CAF Champions League CAF Confederations Cup

Telkom Charity Cup (Soccer)

MTN 8 Cup (Soccer) Telkom Knockout (Soccer)

Nedbank Cup (Soccer) Currie Cup (Rugby) MTN 40 (Cricket)

International Boxing Federations

SABC’S OTHER INFLUENCING FACTORS

Availability of the broadcast rights required, be it for radio or television. Audiences and public opinion. Commercial viability of the sporting activity/property. Availability of platform space to broadcast Suitability to the SABC’s overall strategy and that of the Channel in

question. Long term investment and strategic relevance (incubation)

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SABC’S SPEND TO DATE ON SPORT

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3 year expenditure overview

R860 Million during the financial year 2008/2009;

R910 Million during the financial year 2009/2010

A projected expenditure of R949 Million by the end of 2010/2011 financial year

3 year revenue overview

R261 Million during the financial year 2008/2009;

R364 Million during the financial year 2009/2010

A projected income of R428 Million by the end of 2010/2011 financial year (includes FIFA World Cup)

3 year loss overview

R599 Million during the financial year 2008/2009;

R546 Million during the financial year 2009/2010

A projected loss of R521 Million by the end of 2010/2011 financial year (would be worse with out FIFA World Cup)

SO WHAT DOES THIS TELL US?

So what we can deduce is that rights fees are set to continue their increase over

the next 60 months.

The rate of increase may slow down, but will still out strip the rate of growth on

sponsorship and advertising revenues.

This will result in Free to Air broadcasters being squeezed further and further, as

they do not have a funding model that can sustain the cost growth on sports

rights.

The saving grace for Pay broadcasters is the fact that they can increase

subscriptions to accommodate the rapid increase in the cost of sports rights

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SO WHAT DOES THIS TELL US? CONT.

TopTV has the potential to make this trend worse

Advertisers are spending less and less on sport sponsorship

In developing countries such as South Africa, Brazil and India, the man on the

street, who cannot afford pay TV, will find access to sporting content

increasingly difficult.

In South Africa, access to rugby content on a regular basis, requires that you

pay a minimum of R200 per month, which is a tall order on a net salary of

R1300 per month.

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LOOKING AT BOXING AND THE SABC’s ROLE

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OBJECTIVES

Entertain and inform audiences

Deliver world class live and magazine boxing

To be sustainable

Invest in the development and promotion of both amateur and

professional Boxing

Partner BSA and other boxing stakeholders to create a vibrant industry

LOOKING AT BOXING AND THE SABC’s ROLE

THE SABC SPORT BOXING KEY GUIDELINES

Promoter neutral, no preference for one over the other

Female boxers and promoters to be incubated and developed

Dates allocated annually through a tender process

Dates allocated to the best available potential fights and fighters

SABC does not get involved in the promoters staging of the fight

SABC accesses the promoter based on his staging of the fight against the

deliverables he was given.

International fights are viewed separately and assessed based on individual

merit.

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THE SABC SPORT BOXING KEY GUIDELINES CONT.

The SABC funds a total 26 National and Regional live fights a year

All the funded fights are broadcast live and or delayed.

These live dates are supported by a magazine program on boxing Blow by Blow

(32 broadcasts a year)

Fights are allocated annually to promoters by open proposals/Pitch process

All promoters complaint with BSA regulations can apply for a date.

The panel of assessors is made up of individuals from the SABC and from BSA,

(no promoters are included for the fear of them being conflicted)

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SABC’s INVESTMENT IN BOXING TO DATE

KEY CHALLENGES WITH BOXING

The calibre of fights to date has not been to a standard that assists the SABC drive

audiences

Boxing viewership figures have steadily declined in a constant time slot over 3

years

The quality of promoting and match making is often not to the standard expected

SABC entered into a 50/50 joint venture agreement with Vodacom to support

boxing and Vodacom pulled out of the agreement after 3 years

The Sponsorship industry generally see’s boxing as a bad investment

and as a “blood sport” which does not suit their brands.

The SABC has single handily carried boxing since Vodacoms pull out

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KEY CHALLENGES WITH BOXING

SABC has developed numerous fighters through its investment, only to lose

them to Golden Gloves and Supersport once they become World Title fighters

and audience drivers

To actively compete and see some audience performance and returns from

boxing the SABC would have to focus on top end boxers and that would defeat

the developmental role.

Female fighters are not as readily promoted as male fighters

The two Female Promoters that were being incubated by SABC have both quit

or put their careers as promoters on hold.

There is not enough platform space to cover more boxing

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WHAT IS THE WAY FORWARD ON BOXING?

Reduce our overall quantity of fight dates put to tender per year

Focus on top quality fights, with better fight staging

Investigate options of retaining the Hot Talent Boxers.

Increase the number of undercard fights per live broadcast.

Expand the Baby Champs program to cater for development boxers

Partner with the likes of Wits Business School, Gibbs, UJ to develop promoters

and their promoting skills. Promoters who attend the development program

to be given preference.

Increase the joint effort to seek sponsors in with BSA

Solicit S.R.S.A’s assistance with funding boxing as a National Interest

Sport.

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DEVELOPMENTAL SPORT AND RURAL PENETRATION .

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DEVELOPMENTAL SPORT AND RURAL PENETRATION .

Developmental Sport and Rural Area penetration has been and continues to be a

challenge for the SABC and the key challenges are follows

Platform space particularly on TV, to show the adequate amount of

developmental sport.

Subsequent to bullet 1, is the development of sporting content that speaks

specifically to Rural areas.

The cost of increasing delivery

The commercialization of developmental sport.

The development of some of the federations that manage developmental

sport

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WHAT WE ARE DOING AND INTEND TO DO

One of the key catalysts to better developmental sports coverage, will be the

introduction of a sports channel in the new DVBT2 environment.

We currently cover a large quantity of sport on radio, which has the desired

penetration and in all 11 official languages.

We currently cover the National Indigenous Games, we will be looking to our

relationship with S.R.S.A to assist in affording these games greater coverage and

perhaps live coverage on certain radio stations.

We are looking to increase the duration of Siyadlala, to ensure that it offers

developmental sport a greater voice

Better scripting in our current programs to ensure inclusion of

developmental communities

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WHAT WE ARE DOING AND INTEND TO DO

We need the Committee’s assistance with the defining of events of national

interest to ensure that SABC can provide access to all sport, particularly on

sports such as Rugby which currently does not have a free to air allocation.

We also need the Committee to assist with the “must carry, must pay clause”

which will assist in funding sport within the SABC

We are also looking to the Committee to assist with managing the rights cost

of rights from Federations in particular amongst the big 5, as high costs

reduce the funds available for development sport.

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Questions?

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