Lee Hyo-sik is Finance Desk editor at The Korea Times. He manages finance-related stories on macroeconomics, banks, stocks, bonds, crypto etc. He is passionate about covering what's happening in Korea's financial industry and explaining it to both Korean and non-Korean readers. You can reach him at leehs@koreatimes.co.kr. Your insights and feedbacks are always appreciated.
Did SBS hit jackpot with World Cup broadcasting?
By Lee Hyo-sik
Staff reporter
Exclusive broadcasting of the 2010 World Cup in South Africa by SBS was a triumphant bonanza for the company.
This is the talk of the town these days despite the South Korean football team failing to advance to the quarter finals of the world's largest sporting event Saturday night after losing its second round match 2-1 to Uruguay.
Most media industry watchers say that the nation's third largest broadcaster earned larger advertising revenue than previously expected, thanks to the Korean squad's better-than-expected performance in South Africa.
But they say SBS won't be able to reap huge profits from buying the sole right to screen the soccer games from FIFA because the exclusive broadcasting rights had cost more.
It is also now facing a punitive fine from the government for breaching an initial agreement with the two other terrestrial broadcasters ― KBS and MBC ― to jointly air the games, on top of damage lawsuits brought on by its two rivals.
Additionally, SBS's strict exercising of its public viewing rights, charging outdoor cheering event planners, hotels, movie theaters and other large establishments to screen the games, has instigated strong public criticism.
When the broadcaster aired World Cup games that do not involve South Korea, many viewers turned to KBS, MBC and other channels for dramas and other entertainment programs, posing a challenge to SBS to regain its viewership when the international soccer event comes to an end.
Many have said that SBS must have hit the jackpot as Korea moved onto the knockout stage, generating larger advertising revenue.
In fact, the broadcaster made more money than previously thought. But it is not substantially enough to make up for the enormous broadcasting fees it had paid to FIFA for the exclusive airing rights.
SBS paid about 110 billion won ($92 million) to secure broadcasting rights here.
The broadcasting fee alone cost the broadcaster 75 billion won, in addition to operating expenses to send crew members and broadcasting equipment to South Africa and logistics here.
It is already facing up to 3.5 billion won in fines from the Korea Communication Commission (KCC) for exclusively broadcasting the games. SBS also has to pay an additional 6.5 billion won to FIFA for its airing of Korea's knockout stage match against Uruguay.
Moreover, Korea Broadcast Advertising Corp. (KOBACO) expects a combined corporate advertising amount slated for the World Cup to reach only 70 billion won.
Despite all these possible income sources, it may be hard for SBS to record huge profits on its balance sheets.
SBS has received billions of won from Internet protocol television (IPTV) operators KT, LG Telecom and SK Broadband for the live retransmission of the football games. Web portals Naver (www.naver.com) and Daum (www.daum.net) each paid 1.5 billion won for the Web broadcasts.