Football: Pay per view: You ain't seen nothing yet

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MANCHESTER UNITED begin the defence of their European title with a muted stalemate, none of the English clubs can muster a goal between them - ditto the opposition - and the airwaves above the grounds are rent with the cries of the newly dispossessed as the battle between the two main digital companies turns nasty. On the face of it, the new era of European football dawned grey and threatening. Anarchy on the Airwaves, Digital Disaster, as one tabloid thundered. Confusing certainly, but, in reality, neither as straightforward nor as bleak.

What television viewers saw last week, apart from Chris Tarrant where Des Lynam should have been, was a glimpse of the future, a flexing of muscles by ONdigital, the brash new kid on the box who, together with Sky and NTL, will shape the viewing habits of the footballing public in the next millennium. "The battle between free to air television and pay TV is over, the real battle is now between the pay TV companies," says Mark Oliver of the media and sports consultants, Oliver and Ohlbaum. "It's all a bit of a game between Sky and ONdigital about what each one will pay for what the other's got." The real battleground will be the negotiations for the next round of Premier League rights, due for renewal when the current deal runs out in 2001.

For those bred on a steady diet of Sky football, last week was disturbing. The televisual elite had become the underclass, desperately searching for the wall-to-wall Champions' League football promised by ONdigital and feeling the same frustration as terrestrial viewers when Sky first usurped live Premier League football.

"Sky created a whole new way of watching television and they did that through football, but now there's going to be increased competition and that has to be good," says Graham Stanley, at present director of consumer media at Cable and Wireless, but soon to be the new director of broadcasting at ONdigital. The real question is: good for whom? Certainly good for the clubs, who will receive a higher price for their wares; equally good for the players, who will be paid more. But good for the fan or the game? That's a more delicate matter.

The next television deal is certain to be more fragmented and complex than the last. "This time the Premier League can offer different packages, they can offer live coverage to pay TV and pay per view, recorded highlights to terrestrial, so they should be able to dictate the terms more. The channels won't be able to go behind their back," says Simon Banks of Soccer Investor.

Banks believes that the Premier League could divide the rights up into lots in a model profitably followed by the French Football Federation. Each lot would be open for auction to a mixture of channels with live Premier League games on Friday evening, Saturday evening and Sunday afternoons broadcast available to a mix of pay TV, terrestrial and pay per view stations and the remainder of the Premier League fixtures broadcast on more specialised ppv. FA Cup, Worthington Cup and Nationwide League games would be sold as separate lots. If the rates for the current deal increase by 50 per cent, which Banks thinks possible, the coffers of the Premier League and its clubs would swell by pounds 1.6bn.

A club like Newcastle, for example, might have three or four of its matches included in a 60-match Sky package, 16 more home games broadcast on pay per view and an equal number of away games also open to competitive bidding. Such a flexible structure would give clubs like Manchester United the chance to push their revenues from television rights closer to continental levels, easing the pressure for a breakaway. At present, Milan earn pounds 62m from their domestic rights, six times more than United.

The danger for the viewer is that the new deal will prompt a proliferation of machinery which would turn the average front living-room into the Nasa space centre. In Italy, if Fiorentina, signed to the Stream channel, play Lazio, one of Teleplus's teams, viewers have to buy two decoders, one for each team. Lazio have angered their fans further by selling the rights to their Champions' League matches to Teleplus when their domestic games are shown on Stream, forcing fans to buy a second decoder.

"We're going into the great unknown," says Stanley. "It will be more flexible, but it could get a little more confusing." Granada (Liverpool), NTL (Newcastle) and BSkyB (Manchester United) have all bought their way into clubs as a precaution. "It's like putting your chips down on a series of roulette numbers," says Stanley. "No one's sure which number will come up."

Oliver believes that a swing back to live football on free to air television will be part of the next deal. "If the Champions' League is being watched by 10 million people or whatever for 16 nights, there is a danger that the European game will start to have more clout than the Premier League and the image of the League will suffer," he says.

Nor will ONdigital want to prolong the current feud with Sky longer than is absolutely necessary in case its fledgling reputation is damaged. "They won't want to piss off the Premier League, the government or the fans by withholding provision," Oliver adds. "That might count against them in the negotiations because the club chairmen will have to buy two digital sets and that will hack them off. My guess is that once the main sales drive is over after Christmas, the two will make a deal and sort it out. It's in their long-term interests to do so."

The blanket exposure of European football over the next two months could harm the Premier League in other ways. A survey conducted by The Media Edge has shown that advertisers are willing to pay way over the standard rates to buy a slice of the 16-34 male market delivered by televised European football. In Italy, the rates for a 30-second advertising spot quoted by television stations were, in some cases, 1,200 per cent higher for the Champions' League than for a top five domestic sport. Advertisers paid $83 (pounds 51) per thousand viewers for Champions' League football, more than eight times the cost for an average match in Serie A and 12 times the equivalent sum for Formula One.

"We wanted to cut through the hype and see what the Champions' League was providing," explains Martin Thomas, total communications director of The Media Edge. "We were staggered that such a new event should have such instant appeal to advertisers. Premiums are ahead of grand prix motor racing and that's once a fortnight whereas European football is three nights a week. Uefa would be looking at the figures and saying `bingo'. They've created a money-making machine." One, Thomas warns, which could suck the life and the advertising money out of domestic leagues, though these are early days and there is a real danger of saturation point being reached by next spring. A European Cup final between Molde and Boavista might kill the golden goose, but if the money is in Europe, the big clubs will not be far behind.

This week will see another spin of the roulette wheel. United are away to Sturm Graz on ITV, Arsenal at home to AIK Stockholm on ITV2, while ONdigital alone screens Chelsea at Hertha Berlin. Sky, who have tucked their Uefa Cup ties on Sky Sports News, away from their competitors, lick their wounds and wait for the Ryder Cup. For the Premier League, 2001 could be the ultimate space odyssey.