Football ruling could boost pubco coffers
The freeing up of football screening rights could increase profits for major pubcos by up to 3.5% and benefit tenanted and freehouse pubs in particular.
That's according to analyst Paul Hickman of stockbroker Peel Hunt, who agreed with the estimate that Sky could lose £70m if the advocate general's view in favour of the rights of foreign satellite suppliers is upheld by the European Court of Justice.
"Logically, that benefit would flow into the pub business. Most of it would benefit tenanted pubs and free houses, as managed pubs are increasingly moving away from wet-led models consistent with screen sports.
"Also, we would expect tenants to take a more opportunistic approach to the change in legislation than managed operators, who will be more inclined to await a firm EU ruling, which may be two years away."
Hickman said the economic impact would be "indirect" but would "broadly mean that tenants would derive greater income from their pubs, as their costs would be reduced."
Other tenants would benefit as more would show sport, Hickman said, and "improvements to income would eventually result in an increase in the pubco's share of income, which may roughly be estimated at 50%."
Peel Hunt estimates that such a ruling could be worth £10m to Enterprise, meaning a 3% increase in pre-tax profits.
For Punch it would be £8.7m (3.5%), Marston's £2.3m (1.4%) and Greene King £1.9m (0.7%).
The ECJ is examining the issue for the appeal by Hampshire licensee Karen Murphy of her conviction for screening football via Greek broadcaster Nova.
Meanwhile, Association of Licensed Multiple Retailers strategic affairs director Kate Nicholls stressed that news of the advocate general's view should not be seen as a green light to licensees and operators to install foreign satellite systems.
She said: "We will be talking to our members because there has been a lot of media coverage on the issue with Sky being under threat.
"We need to let members know that this is only the start of the process and not a green light.
"The final verdict could be six to nine months away, and the UK law still stands. It doesn't overturn the Murphy case and licensees could still be liable for prosecution if they use foreign satellite systems.
"We also want to explain the process to our members, and emphasise that it is an opinion.
"The advocate general's comments do not clarify anything but it does leave a glimmer of hope for licensees. It's a whole new ball game now because it has opened the potential for a better deal for pubs.
"Sky offers a very good service, and the quality is great, but it's just the price that is the problem. So I think a hint of competition should keep them on their toes."
