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Online start-up seeks rapid uptake of English football

Online start-up seeks rapid uptake of English football in pay-per-view challenge to Sky TV

By Jonathan Underhill and Tina Morrison

June 19 (BusinessDesk) – Coliseum Sports Media is betting on rapid uptake for its pay-per-view English Premier League Football offering after outbidding Sky Network Television in a three-year contract that will be delivered via the PremierLeaguePass.com website starting on Aug. 1.

Coliseum is a 50-50 joint venture between four Auckland investors and Newport Beach, California-based Cooper Capital Partners, founded in 1989 by former Lion Nathan executive and NBR Rich Lister Peter Cooper.

No figures were disclosed for the rights to 380 live games and a package of previews, highlights and special features, and chief executive Tim Martin won’t disclose targets for subscribers.

PremierLeaguePass.com is initially offering a season premier pass with all the extras for $239.90, a regular pass with all the games plus on demand for $149.90 and a 24-hour Day Pass for $24.90.

“What we really need is all the people who love the Premier League – they really need to sign up,” Martin told BusinessDesk. The business “had a lot of costs upfront” including its investment in technology with New York-based NeuLion, which already delivers digital sports content.

Martin, a former ad-man, and his wife hold a controlling stake in MMCT Ltd, which owns the other half of Coliseum with two other investors, Simon Chesterman, and Coliseum director Kenneth Taylor

Assuming customers all took up the regular season pass, Coliseum needs about 6,670 subscriptions to generate each $1 million of revenue, which would be supplemented by limited advertising and a side-deal with Television New Zealand, which will get broadcast rights to a ‘match of the week’ and a highlights show.

“You do your research, make your assumptions and decide whether or not you’re going to do it,” Martin said. A marketing campaign between now and the August start date would include TVNZ, he said.
“We’ve signed a great deal with TVNZ.”

Sky TV shares dropped 4.6 percent to $5.41 as some investors said the emergence of an online challenger could signal a sea-change in the industry.

"The competitive environment is changing for them," said Mark Warminger, who holds Sky Network shares among the $450 million in New Zealand equities he helps manager for Milford Asset Management.

"For a long time they have held a monopoly in this country and they have been able to secure content across the board," Warminger said. "This is the start of the change. They may lose a number of other sports in the future."

The company's shares have been trading at a price to earnings multiple of 16.9, and are forecast to drop to 14.6 times earnings, according to Reuters.

"Sky TV is no longer a growth company, it is transitioning more to a dividend yield type stock," Warminger said. The longer term consequences of competition should de-rate the multiple of the stock, he said.

In March, Rupert Murdoch's News Corp sold its 44 percent stake in Sky Network for $815.3 million at $4.80 a share. Four months earlier, New Zealand's billionaire Todd family sold its 11 percent stake for $218 million at $5.05 a share.

(BusinessDesk)

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