February 13, 2018

Even before the ITT was sent out to prospective bidders, there were articles and theories doing the rounds: “Amazon plans to bid for the rights to stream Premier League matches in the upcoming auction in the UK, according to a source[1]“; “Facebook set to join bidding for Premier League streaming rights[2]“; and “Some experts believe it is only a matter of time before Facebook, Amazon and other deep-pocketed businesses decide to take on the likes of BT and Sky Sports[3]“.

The Premier League added additional matches to its ITT this year, raising the amount of available matches to 200 and adding Saturday night football to its offering. Whilst Sky snapped up the Saturday evening slot, along with another three packages bringing its total matches to 128 per season, the two packages showing all 20 matches from two Bank Holiday/midweek fixtures remain unsold and up for grabs.

BT Sport has one package, which means it will screen 10 fewer matches in the 2019-2022 seasons, but BT’s cross supply deal with Sky (announced in December), will enable customers of both services to access the other’s sports channels, so neither platform’s customer pool is without key football matches.

Whilst subscribers will be happy that all their Premier League coverage can be secured with just one subscription, it remains to be seen what this will mean for retail prices. From the per match saving that Sky is making on matches over the 2019-22 season compared to the previous three seasons, customers will surely not expect to pay more.

The acceptance of Sky’s £3.5bn for four packages shows, as other commentators predicted, that the domestic bubble on these sports rights is close to bursting. Obviously it remains to be seen whether or not the Premier League will achieve the same fee it did in 2015 (i.e. once the two remaining packages are sold), but it seems highly unlikely that bidders will pay £1.3bn for the rights to those, yet unsold, matches. The likely outcome seems to be that Sky or BT will take one of those packages (Sky cannot have both), perhaps with a third entrant taking up the other.

Whilst Sky can be regarded as the biggest winner in this year’s domestic television rights auction, whether this outcome will have an appreciable effect on the money the Clubs receive, will largely depend on the overseas rights deals the Premier League conclude. Whilst there are certain international markets where the Premier League is the pre-eminent sports property, perhaps with rights fees already at their peak, the international markets always surprise. The Clubs’ marketing efforts in Asia has certainly paid off, although whilst Asia-Pacific was the league’s most valuable overseas region in 2016-2019, contributing $577.5m per season, revenue growth slowed compared to the previous sales round. Rights revenues soared in Europe (ex-UK), up 80% on the previous cycle and, whilst fees in the Americas increased a few percentage points, the payment from Latin America and the Caribbean region more than doubled when compared with the previous cycle[4].

What remains to be tested, is whether there is an appetite for truly platform agnostic rights – whatever happens with the remaining packages, it’s pretty much business as usual for Sky and BT, so we will have to wait another three years to see how far the Premier League will go. Perhaps the most interesting thing for this next cycle will be what the Saturday night matches will do to commercial subscriptions. It certainly made sense for Sky to bid for those rights, allowing it to capitalise on the existing footfall in the UK’s pubs on a Saturday night and enter the battle for advertising revenue from an already lucrative timeslot – but that’s rather a small pot of excitement for what is, so far, a £4.4bn deal.

[1] Bloomberg, January 2018
[2] The Mirror, October 2017
[3] Independent, October 2017
[4] SportBusiness, July 2016