SingTel unlikely to profit from World Cup: Minister

[SINGAPORE] It is "unfortunate" that Singapore is a price-taker, and not a price-setter, when it comes to paying for premium sports content on TV such as the upcoming World Cup tournament.

Football's world governing body, Fifa, has a monopoly over the rights to the quadrennial event and can call the shots when it comes to selling these rights to various broadcasters, said Senior Minister of State for Communications and Information Lawrence Wong.

"We are, unfortunately, a small market with a high interest in football, and may not have enough of a subscription base or advertising revenue base to offset the costs, unlike other countries," he said in parliament yesterday.

He said it was ironic that, the more "desperate" Singapore was to acquire the World Cup broadcast rights, the more leverage it would give Fifa to charge a higher price.

Singaporeans have been up in arms ever since SingTel announced last month that it would cost $112.35 to watch all 64 games of this year's World Cup, which kicks off in Brazil on June 12. The telco has since announced an early-bird price of $94.16 that is valid until this Thursday.

This amount, said Mr Wong, is the same as what it cost to subscribe to the last World Cup at the regular rate four years ago.

During a lively exchange with four different MPs as they debated the soaring cost of subscribing to the World Cup on pay-TV, Mr Wong said it was unlikely that SingTel would make any money from the month-long tournament.

The telco has not disclosed how much it forked out for the broadcast rights. Mr Wong said that, based on all the revenue that it was currently receiving for the World Cup, it would not be enough to recover the acquisition costs.

"This is not a matter of (SingTel) profiting or getting a handsome dividend from acquiring this package," he said.

Overall, he noted that the acquisition cost of broadcasting the World Cup matches had gone up by between 20 per cent and 40 per cent around the world, compared with the last tournament in 2010.

In Singapore's case, the pay-TV operators here are aware that there is a certain range that Fifa looks at before it agrees to sell the rights to broadcast the World Cup.

"It's a narrow range, but you need to pay that amount of money in order to get the rights," he explained.

Mr Wong also said the government remained committed to ensuring that major sporting events, in particular those of national significance, are available to all Singaporeans and not just on pay-TV.

There are many events on the Media Development Authority's (MDA) anti-siphoning list, including four key World Cup matches - the opening game between Brazil and Croatia, the two semi-finals and the final.

When asked why MDA did not put all the World Cup games on the anti-siphoning list, he reasoned that pay-TV operators would then have little incentive to acquire the content.

Instead, the cost burden would have to be borne largely by the free-to-air broadcaster, which in Singapore's case would be MediaCorp. Doing so would divert a "significant portion" of the funds needed for public service broadcasts.

"MDA has to achieve a delicate balance. It should not be hasty to adopt populist measures that ultimately backfire, leaving consumers even worse off," Mr Wong cautioned.

He said that the government would be conducting a review of the existing cross-carriage policy - which requires pay-TV operators to share exclusive content with one another - as part of a larger review of the Media Market Conduct Code later this year.

The anti-siphoning list, which the public was last consulted on in 2012, will also be reviewed in due course, he said.