EPL's New U.K. TV Rights Deal Worth Record $7.8B, Up 70% From Current Pact

The EPL has agreed to a "record new domestic television deal" with Sky and BT starting with the '16-17 season through '18-19 worth $7.833B (all figures U.S.), according to Matt Dickinson of the LONDON TIMES. The figure represents a 70.2% increase of more than $3B on the existing three-year agreement for rights in the U.K., "matching even the highest expectations." With seven packages available, Sky "maintained its dominance by securing five including the key spots of Sunday afternoon and the possibility of ten games in a new Friday night slot for the new deal," which costs $2.1B per year, an 83% increase over the existing contract. BT "won two packages -- to show Saturday evening matches and midweek fixtures, giving it 42 games -- an increase of four -- compared to Sky’s total of 126." The EPL "has yet to start negotiations for overseas rights," which are "certain to rise above" the current $3.4B deal. The new deal for U.K. rights marks a value of $15M per match, and is the second 70% increase "in a row" for the EPL, whose "status as the richest league in the world will be spectacularly enhanced by this contract" (LONDON TIMES, 2/11). The FINANCIAL TIMES' Mance & Blitz note EPL revenues "have spiraled over the past two decades as the competition has emerged as the most-watched, and arguably most hard-fought, of the world’s major domestic leagues." Currently, 80% of the EPL's revenue "is divided among the member clubs," while about 6% goes to "good causes, community facilities, school sports and lower-league teams." Some of the additional cost "is likely to be passed on to fans, although Sky said it would seek to fund most of the additional spending by cost savings." Both Sky and BT "make a loss" on their soccer coverage, but they "compensate by selling customers TV packages and high-speed broadband, respectively" (FINANCIAL TIMES, 2/11).

PLEASANTLY SURPRISED: EPL CEO Richard Scudamore said that he "was surprised by how much the matches had fetched, but he noted that the game was the beneficiary of the two media giants" using soccer to "draw and retain customers." Scudamore: "These are huge companies doing huge things in a market that has gone way beyond football." He added that the EPL "received a broad interest in its rights but would not say who else had bid to show the games" (REUTERS, 2/10). Scudamore said, "We did get interest ... from various types of companies that would distribute in different ways.” He said they included “over-the-top Internet companies” and companies with “different business models" (“Worldwide Exchange,” CNBC, 2/11). The GUARDIAN's Owen Gibson wrote even on a "conservative estimate, the total amount raised once international rights are taken into account" is likely to top $13B over three years from '16-17. The BBC has already agreed to pay $311M "to retain the highlights." That "would mean that even the bottom club" in the EPL would receive around $151M while the champions would get $238M (GUARDIAN, 2/10). 

SIGN OF THE TIMES: The WALL STREET JOURNAL's Simon Zekaria writes the deal is "seen as a litmus test for the ambitions of Sky and BT in the U.K.’s rapidly converging media and telecommunications markets." BT is "spending eagerly to build a sports-channel business." It "made its soccer ambitions clear" in '13 with a winning bid of nearly $1.4B for three-year rights to UEFA Champions League and UEFA Europa League games, starting in '15. The deal also is "seen as crucial to Sky’s business, even as it has spent heavily on other content like original broadcasting to move away from reliance on soccer" (WALL STREET JOURNAL, 2/11).