The beautiful game goes online

While football may be known as the 'beautiful game', the sport is increasingly becoming synonymous with the beautiful deal.

This was highlighted earlier this week when Liverpool Football Club (FC) and Granada Media joined forces to create a new dotcom company, Liverpool FC Broadband. Granada already owns 9.9 per cent of Liverpool FC, but this particular deal is the first of its kind and takes the business of football to a new level.

Granada took a 50 per cent stake in Liverpool Broadband FC for £20m, but the joint venture owns all of its own new media and commercial rights in perpetuity, and can exploit them across both online and broadband networks.

But what does this mean in practical terms?

Rick Parry, chief executive of Liverpool FC, said: "This pioneering project will enable us to provide an innovative, entertaining and informative service for our supporters on a worldwide basis. It is a long-term business venture that will enable us to participate in a global platform and develop the brand."

However, he stressed that the new website is intended primarily to provide services to supporters. Fans will be able to watch delayed coverage of the club's Premiership matches either by paying a subscription or on a pay-per-view basis, and will have access to an online archive of past matches. They will also be able to listen to live commentary of matches and bet on the outcomes.

International fan base
The site will provide additional player-endorsed 'educational' elements, including online homework, revision and language clubs. The latter is intended to appeal to what Liverpool FC describes as "key international markets" such as Singapore. Hong Kong, Malaysia and Scandinavia where it already has a strong fan base.

But the club hopes to woo fans over to the site primarily by providing them with ecommerce facilities, which will sell club merchandise and auction memorabilia. Some analysts have already recognised the earnings potential of such a venture, estimating that it could reach a potential audience of 2.5 million UK fans and another 10 million worldwide.

And with so many potential users, they believe that the website's earnings could even outstrip those of the club itself, particularly as Liverpool Broadband FC, unlike other dotcoms, will not face competition from anyone else. Football fans, unlike other consumers, do not shop around.

Mike Thompson, director of research at the Butler Group, believes that given the almost religious devotion of many football fans to their club, Granada's £20m investment amounts to a jaw-dropping bargain.

"You don't have to build up a customer relationship model for them. They are there. These large football clubs have fan bases all over the world. Marketing-wise it's fantastic. £20m? I heard those words 'in perpetuity'. That has to be the deal of the century when you look at the amount of revenue that can be generated by clubs like Manchester United and Liverpool," he said.

"If you look at that in the context of businesses that will pay £4m and £5m just to have their name on a shirt for two or three years, £20m for all that is peanuts. I think Liverpool FC have sold it far too cheap," he added.

Making waves
Where the deal is likely to affect fans most, however, is through the live 'radio' commentary element of the deal. If Liverpool intends to broadcast its matches online, it may be tempted to try to make them exclusive rather than allow radio stations to broadcast them too. At the very least, stations such BBC Radio 5, which currently provides internet commentary, may lose out.

"It certainly does open up a whole new set of players for the bidding wars whenever the next rounds are," said Thompson. "We've just had the latest television rights and radio, and the radio ones are set in place for the next two or three years. But that will change. The BBC will want to go worldwide because it has its popular internet-based service. It's going to get incredibly complex."

But Thompson does not see why fans should have a problem with the deal. "People are finding it increasingly difficult to have access to matches. Attendances are going through the roof and you can't get tickets. Newcastle is a prime example. You can't even get season tickets," he said.

"It's getting like American sport. In American football and basketball you have season tickets that you have the right to pass on from father to son. You have to have other forms of access or else you can't increase your fan base."

So it appears that digital technology has already changed the nature of football by making it increasingly commercial. Being a fan used to be quite simple - you supported your team and moaned at the referee if he or she came up with a decision you didn't like.

But now as Simon Moores, chairman of The Research Group, said: "It's a great deal more than watching 22 men kicking a pig's bladder around. Now we are at the stage with interactive TV and broadband; where you pay per view, watch the match, buy the drink and buy the shirt."

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