SIS Live searches for OB buyers
As SIS Live puts its OB division up for sale, at least two potential buyers have already earmarked millions of pounds on new equipment. SIS Live has indicated it will sell the OB division’s 14 HD vehicles, but has yet to confirm if it will also offload ancilliary assets including its RF systems and special cameras.
Arena Television has ruled itself out of purchasing any of the assets, preferring to invest in four new scanners over the next 12 months to meet demand from BT Sport as well as sending facilitites to the Commonwealth Games, Brazil 2014 and the Rugby World Cup.
“Buying used trucks is a good quick fix, but they have a shorter lifespan than building from new,” explains Arena managing director Richard Yeowart.
Like Arena, NEP Visions is also embarking on a spending spree, this time on six flypacks as a direct response to winning BBC contracts including athletics, tennis and Wimbledon. It does not rule out, however, a bid for SIS Live’s assets. Steve Jenkins, managing director, NEP UK, remarks: “We will always consider opportunities that will enable us to develop our business and adapt to changing markets.”
Telegenic, meanwhile, has historically chosen to specify its own trucks rather than grow a fleet by acquisition and has not declared its position. Other smaller UK OB suppliers, such as Video Europe and Cloudbass, which purchased key assets from Arqiva’s outside broadcast division last November, may not have the business to justify the spend.
However, CTV director and COO Euro Media Group, Barry Johnstone confirmed that Euro Media, which acquired the assets of Alfacam at the start of the year, will look at what SIS Live makes available.
There is a scenario in which SIS Live’s fleet may not be sold back into the market, potentially reducing total available truck capacity in the UK and concievably adding a premium to hire.
“I don’t see any major change in the price suppliers charge clients unless SIS’s trucks were to disappear from the market,” says Johnstone.
A price rise alarm has also been raised by Jeff Foulser, chairman of sports production company Sunset+Vine. “OB companies may feel they have a window of time to get back at some of their clients who have driven prices down over the years,” says Foulser.
With competition for large-scale contracts effectively concentrated on four players (NEP Visions, Telegenic, CTV and Arena), Foulser even theorises that Sky may invest in its own OB outfit. Such a move may depend on it beating BT to the next tranche of EPL rights from 2016-17.
“Sky have been a very powerful player for 20 years and very clever about portioning enough work to each of the bigger OB companies to keep them in business, but not making them too rich,” says Foulser, who speaks with some authority since S+V former parent Television Corporation owned Visions before offloading it to NEP for £16.8 million in 2004. “The fewer of them there are, the more difficult it is to control pricing. I can see that only going one way. Sky may decide to open it’s own OB division.”
Unsuprisingly, perhaps, suppliers are defending their position. “We’ve seen no hint of any changes in the high service levels offered by our fellow OB companies or for that matter in pricing,” declares Yeowart. “From a numbers point of view, having an added slice of turnover will allow the remaining players to offer better economies of scale across their business.”
“I don’t think it will make a big difference.. every market goes through periods of consolidation and expansion,” says Brian Clark, commercial & technical projects director at NEP Visions. “The market will find a new level to sit with SIS not being involved.”
Adds Johnstone: “I don’t think prices are that low that everyone is waiting for payback time. Most of us feel we’ve done a job for a fair price. Those that work with big clients are happy with what they have.”
All these executives had consoling words for the 240 experienced technicans, managers and camera ops who are being let go from March as a result of SIS Live’s exit. Clark says Visions has already employed a handful, and with skilled OB crew at a premium, an exodus of them onto the market should also keep costs from spiralling.