The Globo Organizations are confronting their First World War — the first challenge since they took the scepter of ratings champion from TV Tupi, in the long-ago 1970s.
In the next few days, the issue of who will broadcast the Brazilian football championship will be settled. This is not just another sporting event or series of events. If Globo loses the dispute, the entirety of Globo’s prime time line-up will be at risk — based on the daily TV viewing habits of soap opera and news watchers.
For the first time, Globo could lose its status as absolute leader in the ratings.
One challenger isTV Record, which promises R$ 550 million for the rights to the broadcasts of the Club of 13. Underlying this dispute are significant legislative changes in Brazilian commercial. law
Every football team retains the broadcast rights to its own games.
Years ago, in order to manage its interests, Globo patronized the Club of 13, whose job was to negotiate the rights of its associates — the major Brazilian teams — as a single bloc.
In the U.S., for example, major teams receive air time superior to smaller teams.
Arguing that conditions in Brazil are different, however, Globo succeeded in distributing the transmission rights equally — everyone receiving the same amount. This tactic is fundamental to the sale of open to air broadcast rights, in which it is not possible to impose the pay per view model.
If a club with higher attendance were to complain, its complaint would be referred to the Club of 13, which would try to talk it out of its demands.
And there’s more. Using a leonine — one-sided — contract, Globo inserted a clause affording it preference, the right to offer the final bid in every auction of the championship games. That is, after the last bid is in, Globo has the right to cover the best bid already presented.
This model has been questioned by antitrust authority CADE.
Globo and the Club of 13 were obliged by CADE to sign a formal promise establishing greater transparency in thec competitive bidding. That is, every proposal must sealed in its own envelope and represent the bidder’s offer.
At first, Globo called the clubs together and tried to get them to drive prices down, arguing that the audience for football has been falling for some time now and the market will not withstand paying major bids for transmission rights.
The broadcaster could not conceal its main concern: Elsewhere in the world the network with the most possible sports is an audience leader. If Globo loses football, it loses ratings supremacy.
The major problem follows directly from this.
In other times, there were no competitors. Only SBT once tried to compete, obtaining rights to the São Paulo state championships. Bandeirantes and Rede TV never had a chance.
Now, here comes TV Record saying it is willing to pay R$ 550 million for the open to air broadcast rights. In the pay-TV sector, there is more and more competition with the telecoms companies, while in the Internet sector,the Web portals are important.
Globo’s reaction was to try to implode the Club of 13. Using Ronaldo and sports anchors it managed to coopt the president of Corinthians.
Whatever the results of this dispute, it will be remembered as a crucial chapter in the history of transformations the Brazilian media is going through.
Filed under: Brazil