An assessment of the near-£4.5B ($6.3B) committed to Premier League clubs for live U.K. televising of their matches from '19‑22 "can be assisted by adapting a famous old quip: reports of football's bubble bursting are greatly exaggerated," according to David Conn of the London GUARDIAN. This £4.464B ($6.25B) to 20 football clubs, "on which Sky and BT Sport will aim to make profits by charging supporters subscriptions," is approximately £500M ($699.9M) less than the record £5.14B ($7.19B) the two broadcasters paid last time for the '16-19 rights. But it "does not look like the beginning of the end for the money feast" for clubs, their owners, managers, players and agents, "which they have been served up for 25 years" by making supporters pay to watch football on TV. The agreements put the new deal at around 90% of the current £5.14B deal, with two remaining packages to be sold. These two are experimental, "seemingly designed to attract an internet platform:" all 10 matches on the fixture list can be broadcast simultaneously, four different times per season. Talk of the "bubble bursting" overlooks that these concluded sales are only for U.K. broadcast. Overseas rights sales are "still to be sealed, in a global village whose populations are engaging with ever-increasing interest in the English top flight's spectacle of multinational stars" (GUARDIAN, 2/14).
Premier League auction: Sky keeps Super Sunday. BT only bags one round so far - Saturday 1230 games. Two (fairly unattractive) slots still to be decided. Overall value £4.46bn (as opposed to £5.1bn last time). Massive deflation.— N̈ic Fildes (@NicFildes) February 13, 2018
MARKET CORRECTION: The AFP's Kieran Canning reported with more games "still up for grabs," the overall deal for the 200 matches on offer each season -- up from the current 168 -- "could still surpass" the £5.14B paid for '16-19 but the price per game "has at the moment dropped" from £10.2M ($14.3M) to £9.3M ($13M). EPL Exec Chair Richard Scudamore "could barely contain his glee when he announced the whopping increase" in the value of the U.K. TV rights three years ago. Former EPL CEO Rick Parry said, "I think the abnormal deal, the one that took everyone by surprise, was the last one -- a 70 percent increase which was way more than I think anybody was expecting. It's a little correction in the marketplace." Where the Premier League expects to "keep cashing in" is overseas TV rights. In November, a three-year deal from '19 was reportedly agreed with China's PPTV worth $700M -- "10 times the current contract for Chinese TV rights." U.S. broadcaster NBC also reportedly paid $1B for the six seasons until '21-22 in '15. Deloitte Sports Business Group Senior Manager Tim Bridge said, "On the international stage, deals have already been done in the States, China, Brazil and Africa. The significant growth in new markets suggests the appetite for the Premier League around the world hasn't diluted" (AFP, 2/14). In London, Conn also reported the "sudden ferocity" of competition between Sky and BT Sport, which "boosted the Premier League clubs' coffers" for the '16-19 cycle, has "calmed a little" after the two companies signed a deal in December which "enables each to offer the other's channels on their platform" (GUARDIAN, 2/13).
As I predicted, there was only one likely scenario with the Premier League TV rights auction; the status quo (for now). And this is a huge sigh of relief for both BT Sports and Sky Sports #EPL— Paolo Pescatore (@paolopescatore) February 13, 2018
PROFIT OUTLOOK: BLOOMBERG's Mayes & Hellier reported Sky is "snagging more rights than ever -- and paying less to boot" -- a "bonus for suitors" 21st Century Fox, Walt Disney Co. and Comcast Corp. The European broadcaster won the bulk of the Premier League rights but will pay 16% less per game, "offering buyers comfort about the profit outlook of its pay-TV business." Sky, the subject of a takeover bid from Fox, "rose for the first time above the offer price on speculation its minority shareholders will push for a richer deal." London-based Mirabaud Securities senior analyst Neil Campling said, "The lack of content cost hyper inflation eases the path to the attraction of Sky to suitors." Analysts had also "largely been forecasting that the inflation would continue," with Credit Suisse seeing a 30-40% rise and Ampere Analysis expecting a 15% gain. The "absence of a strong showing from the digital players" and a content-sharing agreement between Sky and BT "may have contributed to the restrained bidding." OC&C Strategy Consultants partner Mostyn Goodwin said, "In advance, there was a lot of signaling from both parties that they were mindful of what they were willing to pay" (BLOOMBERG, 2/14).
Share price for Sky and BT up in early trading this morning as the market reacts to the new Premier League domestic tv deals. pic.twitter.com/wAha23S193— Richard Conway, BBC (@richard_conway) February 14, 2018
MARKET MOVEMENT: In London, Callum Jones reported the London market was "on the rise" Wednesday morning as Sky and BT climbed higher after "keeping hold" of Premier League TV rights. Shares in Sky gained 35 1/2p to £10.96 1/2 after it agreed to pay £3.58B ($5.01B) over three seasons from '19 for 128 live matches per year. BT Group rose by 3 1/4p to 229p after announcing an £885M ($1.24M) deal to show 32 games each season. IHS Markit's Tim Westcott said, "The outcome so far of the auction will be relief for the incumbents Sky and BT" (LONDON TIMES, 2/14).
Details of remaining two EPL packages still to come. As things stand, domestically rights values haven't risen, though worth keeping in mind that an incredible amount of money still being paid out for them. All manner of factors impacting e.g. changing content consumption.— Prof Simon Chadwick (@Prof_Chadwick) February 13, 2018
FINAL PIECES: In London, Ahmed & Fildes reported people involved in the auction said that the Premier League had not sold the final two packages as it "failed to hit" its reserve prices (FINANCIAL TIMES, 2/13). Also in London, Jeremy Wilson reported BT said that it "will continue to engage" with the Premier League over the final two packages of midweek and bank holiday matches. Each broadcaster is limited to a total of 148 matches, "meaning Sky can only win one of the two remaining packages" (TELEGRAPH, 2/13).
Not one top flight football match has been live on BBC or ITV since the top clubs broke away to form the Premier League in 1992; fans have to pay £subscriptions. That's now set to extend to 30 years, to 2022.— David Conn (@david_conn) February 13, 2018
SUBSCRIBER APPEAL: The BBC reported University of Liverpool senior accountancy professor Kieran Maguire said that Sky and BT "need to think carefully about what they charge viewers for the football packages." Maguire: "If you get the pricing right the subscribers will be there, but there's not a lot of wiggle room there to go up in terms of what they are charging per month, and that's why subscribers have been turning away" (BBC, 2/14).