Last update 11/12/2010 5:00:00 PM (GMT+7)

VTV exec advocates TV association to negotiate football broadcast rights deals

VietNamNet Bridge – Vietnam’s football fans are upset that they’ll have to pay a lot to watch top European matches. A top manager at Vietnam Television (VTV) confesses to Tuoi Tre that an excess of competition among units of the state-owned broadcaster may have driven up the cost of broadcast rights.

Suddenly, Vietnam has joined the rest of the world in the era of pay-to-view sporting events, to the dismay of football fans. For a package including La Liga (Spain), Serie A (Italy) and Sunday English Premier League matches, to be broadcast exclusively over the new joint-venture channel K+, football fans will have to pay three million dong ($165) annually. Fans will also have to buy a decoder for about 1.5 million dong.   

The state-owned Vietnam Television network holds 51 percent of capital in the new cable channel, K+. Its minority partner is the French broadcaster, Canal+. VTV now has obtained exclusive broadcasting rights for seven major world football leagues. To watch many of these games, football fans must become subscribers of K+ and pay charges that are way beyond the means of average Vietnamese.

Broadcasting fees soar

MP & Silva, the Singapore company that holds exclusive rights to market English Premier League (EPL) matches in Vietnam, paid $8 million to secure these rights for three years. It earned up to $10 million by selling exclusive broadcasting right of EPL matches on Sunday to K+, $1.7 million by selling EPL matches on Saturday to SCTV (Saigon Cable TV), $1.8 million from VCTV (VTV Cable TE) and nearly $300,000 from VTC (for broadcast on high definition channel only).

MP & Silva thus earned $13.8 million from four State-owned TV broadcasters in Vietnam for the EPL copyright.

Three years ago, VTC broadcaster paid only $1 million for the right to broadcast a season of EPL, including matches on Saturday and Sunday. The cost increased to $1.1 million in 2008 and $1.2 million in 2009. Now it has soared to $10 million for 2010-2012, an increase of three hundered percent!

Coincidentally, broadcast rights for Bundesliga (Germany) matches have gone from $40,000 to $220,000 in 2 years. The copyright fee for La Liga was $350,000 for three seasons in the past, now K+ has paid $1.5 million for three seasons.

Tuoi Tre has been covering this story aggressively. Here VietNamNet Bridge summarizes some of the southern daily’s reportage on the new economics of football broadcasting.

Tuoi Tre: K+ is a business which is 51 percent owned VTV. What is VTV’s role in managing K+ and designing the charge packages for the international football matches K+ will broadcast?

Nguyen Thanh Luong, VTV Deputy General Director: VTV is a State-owned media agency and its mandate is socio-political: diffusing the policies of the Party and the State and providing free news and programs to the public on its channels.

It’s part of VTV’s job to provide an acceptable level of entertainment and sports programming to the people, at a reasonable cost to the state budget.

In case of sports, we managed to obtain broadcasting right to all matches at the recent World Cup 2010. However, La Liga (Spain), Seria A (Italy) or the English Premier League are different. They are really luxury products. The cost of broadcast rights for their matches has been rising to compensate for the ever-higher salaries paid to football stars.

Because they are luxury products, they are not free. It’s obvious that the State should not pay high fees for the rights to these matches in order to broadcast them for free.

As the demand for these games is high, television service providers step in. They buy the rights to broadcast these matches on pay-TV channels. K+ is also a pay-TV channel like other cable TV channels. It operates under the Enterprise Law and its goal is profit.

The charge packages that K+ is offering are calculated based on their investment and the cost of the broadcasting rights, including their profit. VTV holds 51 percent of capital in K+ but it mainly controls the contents.

VTV’s major responsibility in this venture is ensuring that programs broadcast on K+ are healthy and have high quality. We won’t intervening in its business when it doesn’t violate the law.

Tuoi Tre: At least four TV broadcasters competed to buy the right to broadcast English Premier League matches this year, including SCTV, VCTV, K+ and VTC. As the result, the total fees paid for four separate packages to have come to $13.8 million over three seasons.  Now, VTV owns 51 percent of K+. It owns fifty percent of SCTV and VCTV. VTC is also a State-owned business.  Don’t you consider it odd that four State-owned TV broadcasters competed with each other to push up fees to an outside provider?

Luong: That’s my headache! It is not good for businesses when subsidiaries of the same mother company compete for the same broadcasting rights.  But as the solidarity of Vietnamese people is not high, it is very difficult for them to cooperate.

Tuoi Tre: Who is responsible for this result? Couldn’t the Vietnamese bidders have worked out an agreement among themselves before negotiating with the foreign providers?

Luong: This situation of competition amongst ourselves will cause a lot of trouble for the general public. There are no rules to compel coordination in this field. VTV only manages the contents of programs. The Agency for Radio and Television Broadcasting only steps in when the contents of TV programs violate the rules.

We are trying to establish a Television Association. This will be a non-government organization which will work to ensure the common interest and equality of members. The association will try to reach agreements among members before negotiating with foreign partners. We’ll aim to bring copyright fees to the lowest level, to ensure the national interest and the interest of the audience and of each member.

Personally, I like football very much but sometimes I think broadcasting rights have become absurdly expensive. Why don’t all broadcasters form a common front to force down the copyright fees, even if they must stop broadcasting international football games for a season. The fee will be surely lower the next season.

One reason that broadcasting rights for international football tournaments in Vietnam are so expensive is because foreign partners realize that Vietnam is a very hot market.

Lawyer Phan Trung Hoai: the public interest is not being served

VSTV on June 25 announced that it has obtained exclusive broadcasting rights for the English Premier League (EPL) and Serie A in the next three seasons.

However, people only know about this “exclusive right” through EPL’s designation of the Singapore ‘sports media agency’ MP & Silva as the exclusive marketer of the EPL broadcasting right in Vietnam. MP&Silva’s document in turn confirms that VSTV holds the broadcasting right for all matches of this tournament.

The Vietnamese state respects and protect intellectual property right of organizations and individuals. However, I think that in this case, VSTV is a unit of VTV so there are some problems that arise.

A state-owned firm like VTV should have carried out State policy of financially supporting the transfer and use of intellectual property to serve public interest. That’s stipulated at clause 3, article 8 of the Law on Intellectual Property. Instead, VSTV, a subsidiary of VTV, strives to get exclusive right to broadcast EPL matches, in order to fix high monthly subscription fee and high prices for digital decoders.

The state capital in VSTV is the contribution of the people and business. In this case, the State must ensure a balance between the interest of the intellectual property holder and the public interest.

In addition, are the documents provided by EPL and by MP&Silva sufficient to establish that VSTV has the exclusive right to broadcast EPL in Vietnam? In this case, related sides must register broadcasting rights with competent Vietnamese agencies.

The cost of the digital decoders and the and monthly subscription fee fixed by VSTV are high; it is necessary to consider this matter under the Law on Competition. This law bans activities that restrict competition like taking abuse of a monopoly position in the market and economic concentration.

Source: Tuoi Tre