Pubs urge Sky Sports to change 'unfair' cost assessments

By Rebecca Weller

- Last updated on GMT

Vital to trade: pubs urge Sky Sports to change 'unfair' cost evaluation process as it 'penalises' successful businesses (Credit: Getty/ georgeclerk)
Vital to trade: pubs urge Sky Sports to change 'unfair' cost evaluation process as it 'penalises' successful businesses (Credit: Getty/ georgeclerk)

Related tags Finance Sport Property

Operators across the sector have called for Sky Sports to re-evaluate the way it calculates “unfair” subscription fees, claiming the current process "penalises" successful businesses, though Sky asserts it "recognises the importance of pubs".

The broadcaster currently bases charges on the rateable value of individual pubs, determined by the Government’s Valuation Office Agency depending on the size of the venue, location and various other factors.

However, licensee of the Red Lion in Northamptonshire, Colin Smith, claimed Sky had “set a precedent” of increasing its subscription costs in line with rateable values but has not acted accordingly now some rates have reduced.

Smith said: “They’ve set the precedent by putting the price up, even in their terms and conditions it says if the price changes upwards you must notify them.

“But now it's gone against them, they're not prepared to reduce it, which is totally unfair. This industry is hard enough without them basically ripping us off.

“It is wrong a big company like that can put prices up every year, change it when the rates go up and not change it when it goes down.”

In addition, Smith claimed to have to contacted Sky regarding this issue but was told the company could not do anything to help.

Vital to trade

According to Government data, the changes that came into effect on 1 April this year, which were adjusted to factor in the impact of Covid, meant pubs saw an average decrease in their rateable values of approximately 17%. 

Smith, who has been a Sky customer for some 15 years, added having a Sky Sports subscription was “vital” to retain trade with more than 35% of the pub’s custom coming from the sports market.

“When there are big matches on, if we couldn’t show them, we’d be empty, people would go somewhere else. It could seriously harm the business.

“If I could get away with not having it, I’d be in a much better position, but you have to compete in this game. In a way, we're tied to having it, and I think Sky know that”, he continued.

The operator alleged the Red Lion’s rateable value had decreased from £10,200 to £5,250, meaning if Sky were to amend their subscription fees the pub would save a “massive” amount of money each month, reducing from £754.38 to around £460.

Moreover, the operator claimed those savings could be invested in the business to carry out work that “needs to be done”, which is something he “can’t afford to do” right now.

He said: “If someone could make [Sky] see sense or they could be pressured to put the price right, the industry would be in a better position.

“I'd lose a lot of trade if I cancelled my subscription. I've got a lot of competition around me; we need Sky Sports to pay our bills because we need the custom.

“They're making millions, recording massive profits, but don’t seem to care about the individual customers.”

Echoing this, licensee of the Royal Dyche in Burnley, Lancashire, Justine Lorriman, claimed the amount of money the pub spends on various sports subscriptions per month equated to an extra employee’s wage.

She said: “It’s sad because I'd rather put another job out there and employ somebody new."

Lorriman, who has been with Sky for around a decade, added while the broadcaster does support pub customers with PoS and marketing material as well as offering a discount to Molson Coors clients, the fact new customers are offered better deals than existing ones is “frustrating.”

Moreover, the licensee, who pays some £1,000 per month for Sky Sports alone, added the way it calculates fees on rateable values was “unfair” as nearby similar premises pay “half the amount” of the Royal Dyche, which is a finalist in this year’s Great British Pub Awards​ in the sport category.

“I'd lose a lot of trade if I cancelled my subscription. I've got a lot of competition around me; we need Sky Sports to pay our bills because we need the custom.

“But it’s frustrating because I feel like my hands are tied behind my back, I don't have a choice, I just have to pay it.

Packed calendar 

“With how hard things are at the moment, the cost-of-living crisis and energy bills as well as price increases from breweries this year, a big company like Sky could be doing more to help the industry”, she said.

This comes as recent data from CGA by NIQ revealed people who watch live sports at pubs​ and bars spend 36% more on drinks and food every month than non-sports fans with 87% stating they stay out longer than usual when a live game is on.

Football, in particular the English Premier League, was the most watched sport ahead of rugby union, boxing, cricket and Formula 1, according to the report.

A spokesperson for Sky Business said: “We recognise the importance of pubs across the country and are committed to providing an unrivalled service to our commercial customers, which includes sharing the biggest moments from a wide range of fantastic live sport.

“Our pricing structure for Sky Business is tailored around the pub’s business and there are a number of components that are considered including the rateable value of the property, its location, whether they offer food and access to partnership discounts of up to 50%.

"As a total package, these components help customers deliver the best sporting experience for venues.”

This year's Sky Sports fixtures include more than 400 live football games such as the Premier League, F1, Cricket, including the Ashes series and ICC Cricket World Cup, a variety of golf events, for example the 2023 Ryder Cup plus weekly events throughout the PGA tour calendar, in addition to boxing, darts, the US Open Grand Slam in tennis and more. 

In addition, Sky stated its products are a tool to increase footfall, dwell time and spend in venues, quoting data from the IPSOS Landlord Survey 2023, which revealed 75% of licensees agreed showing live sport helped increase their business revenue throughout the year. 

Adds to atmosphere 

However, licensee of the Coach House in Humberston, Lincolnshire, David Butler, stated the way Sky calculated its fee “penalised” successful businesses.

Though Butler, who pays around £1,200 a month for Sky Sports at the pub on top of £1,600 to other providers, asserted the cost issues for sports packages were industry wide and all providers needed to asses this. 

"As a food-led sports bar, it's difficult for us to say we don't want [the subscriptions] because it does bring people in, which adds to the atmosphere”, he continued.

Butler, who gets around 20% of his trade from the sports market, likened having the packages to having electricity, stating if pubs turned the electricity off people wouldn’t visit them and the same could be said for Sky Sports in many venues.

The operator added a fairer method needed to be instated for calculating fees, for example a set price for all, a charge per box, reductions during quieter sporting months or a pay per game system.

He said: “If we had more money to spend and invest in the pub, we would be able to do more things and pass more things on to the customers, but it's very difficult at this particular time when everything's going up and we’re trying to look at all our costs.”

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