SBJ/20090126/This Week's News

Bidders line up for U.S. rights to Premiership

At least three networks have emerged as serious bidders for the U.S. media rights to the English Premier League, the world’s most popular soccer league.

ESPN, Fox Soccer Channel and Setanta Sports are lining up to acquire the rights when the bidding process officially opens this spring or early summer. The EPL is making a three-year package available, from the 2010-11 season through the 2012-13 season.

The U.S. media rights will be awarded after the league decides what to do with the six British packages that it is selling. The EPL has set aside Feb. 3 as the day it will hold an auction for those packages, sources said. Fox Soccer parent News Corp., Setanta and ESPN all plan to bid on those U.K. rights.

The Negotiators Behind
The U.S.-EPL Package
ESPN
John Skipper, executive vice president of content
Fox Soccer Channel
David Sternberg, general manager
Dermot McQuarrie, senior vice president of programming and production
Joshua Glassel, director of programming
Setanta Sports
Roger Hall, managing director international
English Premier League
Richard Scudamore, CEO
Phil Lines, head of international broadcasting and media operations

The process in the U.S. and other international regions should begin soon after that tender has concluded, which is a risk considering the havoc that the global economic recession is having on media companies.

The time difference between Britain and the United States also is working against a significant U.S. rights fee increase, especially since most EPL games would be played on weekend mornings — a time slot that typically does not see big enough ad sales to justify a large rights fee increase.

During the last bidding process, the EPL netted just $57 million over three years from Setanta and Fox Soccer for rights in the U.S. That sum amounts to just 6 percent of its total international rights.

Overall, the EPL has reaped a windfall from its last round of TV contracts, which is bringing in $3.5 billion per year in the current contract — $2.5 billion of that from the domestic British market.

“We know through the Fox (ratings) numbers and the Champions League number from ESPN that there’s a legitimate demand for the sport here,” said Jeff L’Hote, head of LFC International, a New York-based soccer consultancy. “The opportunity for a U.S. broadcaster in this round of bidding is greater than last time and for that reason the value will increase.”

The Premier League is hoping that a bidding war will push the U.S. rights fees higher. Fox Soccer Channel and Setanta Sports are expected to bid aggressively, since the Premier League has been the foundation of both networks. Fox Soccer, which has held the rights since 1998, changed its name from Fox Sports World in 2005 largely because of the value of the Premier League, and it is now distributed in approximately 35 million homes. Its highest-rated Premier League match between Chelsea and Manchester United drew 243,000 viewers on Jan. 11.

“We’ve been their partner for 11 years now in the U.S.,” said Fox Soccer Channel general manager David Sternberg. “We’re focused on continuing that relationship, and we’re going to pursue vigorously the extension of our programming rights.”

Setanta Sports is a premium channel that costs $14.99 a month and is available on Dish Network, DirecTV, Cox, Comcast, AT&T U-Verse and Verizon FiOS. Soccer is one of its key sports, and the Premier League is its most important property with more than 150 live and exclusive matches per season.

Hall

“We know that the product is arguably the most important product in the soccer marketplace in terms of viewer appeal,” said Roger Hall, managing director international for Setanta Sports. “That’s going to make it a competitive process that will involve the usual suspects.”

Setanta and Fox Soccer collaborated to split the U.S. rights for three seasons in 2007. The deal has worked well for both parties and it’s possible that they will collaborate again later this year. Because Setanta is a premium channel, it doesn’t require advertisers the same way Fox Soccer does; and because Fox Soccer doesn’t show every game, Setanta is still worth purchasing in the eyes of the most ardent soccer fans.

“We have a very good track record [with Fox Soccer Channel],” Hall said. “All things point to that being a positive relationship in the future.”

The Premier League also is counting on ESPN making a serious bid based on the network’s increased interest in soccer since the last time EPL rights were up for bid. In that time, ESPN signed Major League Soccer to an $8 million-per-year deal through 2014.

ESPN could be more interested in the EPL’s broadband rights, which are currently held by Fox Soccer Channel and Setanta, rather than its TV rights. ESPN has been building up its online video network, ESPN360, with international soccer rights.

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