Commentary: Is a SingTel-StarHub joint BPL bid still on?

First, it was on. Then, we’re not so sure.

Without the protagonists even speaking a word about it, the market has been filled with talk of a possible SingTel-StarHub joint bid for the upcoming three seasons of exclusive Barclays Premier League (BPL) content.

Yet, after days of drama, consumers are still no clearer on whether they will 1) have to pay more because of the higher bids predicted 2) buy two set-top boxes to watch different matches should the bids be split.

Things all started last week, after Deutsche Bank put out a research report, predicting that Singapore’s two big telcos, which respectively run a cable TV network and an IPTV network, may table a joint bid for the BPL matches in an attempt to prevent an unpopular escalation of costs.

How Deutsche Bank came to those conclusions it did not clearly say. It merely predicted that this was how the market would pan out, especially given the unhappiness among consumers about the unhealthy competition in the marketplace.

This was followed by remarks by a government consultation group this week, which recommended that SingTel and StarHub cooperate rather than bid up the prices for the upcoming BPL content.

The Programme Advisory Committee for English Programmes (PACE), which gives feedback to the Singapore government, says it was concerned that the competition was bad for consumers. Well, that’s not really news, since we have been on that for three years now.

Then, yet another report, taking the opposite stand, came from Goldman Sachs yesterday. It argued that the likelihood of such a joint bid was “wishful thinking”, as the BPL content owners would simply reject it.

So, where is everything going with all the speculation? Nobody knows, except that the results will be out in the next few months, as they did in late 2006 in the last round of bidding.

Most notable during all this debate, however, is the media regulator, the Media Development Authority’s (MDA) silence. It has merely said it has been consulting experts on the issue, but added little more.

As before, it is leaving things to market forces. Now, look what is happening. Fattened by their profits from mobile and broadband services, SingTel and StarHub are distorting the market by possibly raising their bids from the last round’s estimated US$150 million to as much as US$400 million.

Most market watchers who believe that MDA cannot/should not do anything should consider this:

1. Content reselling has been ongoing in Australia, where Foxtel resells its BPL channels to Optus, after similar unhealthy bidding exercises. The content owners, the FA PL (Football Association Premier League), have accepted the practice.

2. The argument that BPL content is a luxury, and rightly commands the highest prices, is right as long as the market is not distorted. Regulators have to step in when the market cannot correct itself and rebalance.

Is there nothing to be done with spiralling BPL prices? Here are some ideas:

1. MDA to mandate a price ceiling for sports or BPL programmes
Essentially, this limits how much StarHub and SingTel can bid. No, this does not stop them from drawing from earnings from other profitable sectors to bid, but at least it prevents users from paying through the nose. This way, the content owners keep their exclusive content deals, so MDA keeps them happy while actually doing something to correct the market for consumers.

2. MDA to bite the bullet and force a wholesale deal
This is what football fans want, but MDA is probably not sure if it wants to risk having the BPL folks walk away from Singapore (I don’t think they will because they want money – it’s just the amount). This works like Australia, where StarHub or SingTel will resell the content it purchases from the FA PL.

3. A joint bid by SingTel and StarHub
This may be unlikely for two reasons. One, the two can’t see eye-to-eye. Two, BPL would say no, especially if this is done without some strong-arming from MDA. However, if against the odds, SingTel and StarHub form a joint venture and bid for the content, what happens? Or if both SingTel and StarHub lose in a joint-bid, does that mean ESPN Starsports can win at a lower cost, and therefore benefit viewers?

4. Football fans to simply say no
I’ve said it before. This is probably the surest way that things will change. While I love watching Wayne Rooney and Manchester United every weekend, there is a limit to the money and hassle I wish to pay. There is also the idea of fairness.

Lest the FA PL forgets, it owes a lot of its clout and world-beating popularity to the spread of live TV around the world, particularly in Asia.

So, for these folks to say: “BPL’s a luxury, take it or leave it” to fans who basically made the league the most popular in the world is, frankly, deserving of a smack in the face – or rather, a call to your pay-TV operator to cancel the channel.

If the cost is too much, I’m cutting my sports subscription and going to a pub with friends to only watch important matches, which was the way things used to be years ago.

But before that happens, I’d like the regulator to do more for consumers than what it has done now, which is simply standing on the sidelines, hoping for the spectacle to play out quietly.