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Volume 6 No. 266

Media

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).

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).

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).

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).

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).

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).

Liberty Media secured a partnership with ABC, ESPN after NBC declined to renew its deal.
Photo: GETTY IMAGES

Formula 1 fans in the U.S. will get to watch Sky's grand prix coverage in '18, after it was confirmed that ESPN and ABC will broadcast the pay-TV channel's service this season, according to Jonathan Noble of MOTORSPORT. After F1's previous U.S. broadcaster, NBC, announced that it was "not interested in extending" its TV rights deal into '18, F1 owner Liberty Media concluded a deal with ESPN and ABC instead. The channels "will use Sky's comprehensive F1 service for its coverage," with all 21 races scheduled for this season set to be shown. Sky's coverage "boasts a host of former F1 drivers" including Martin Brundle, Damon Hill, Johnny Herbert, Paul di Resta and Anthony Davidson (MOTORSPORT, 2/13). AUTOWEEK's Matt Weaver reported ESPN motorsports coordinating producer Kate Jackson said that the deal was signed "to provide American F1 fans with the best possible content available." Jackson: "Their coverage of F1 is second to none, and we look forward to bringing their expertise and authenticity to our audiences." Conversely, Sky Sports exec producer Scott Young sees this as "a means to expand SkyF1" into an int'l market. The agreement for ESPN to air the Sky Sports coverage was arranged by F1 (AUTOWEEK, 2/13).

McLaren Formula 1 Exec Dir Zak Brown said that the team's behind-the-scenes Amazon documentary "would have fallen flat if the team had censored some of its more controversial moments," according to Jonathan Noble of MOTORSPORT. Amazon's four-part Grand Prix Driver series, which was released last week, follows the McLaren team's preparations for the '17 campaign and "exposes the struggles and frustrations it felt as its relationship with Honda fell apart." Scenes like a "troubled new car engine fire-up, and some eye-opening radio conversations from Fernando Alonso during pre-season testing, have helped the series earn praise from fans who have seen it." Brown said, "We took a decision: if you are going to do a show like that, then you have to be authentic to what the purpose of the show is. So we let them in places and meetings, like we have every Tuesday race debriefs. We took the view that it would be counterproductive if it was the inside of McLaren, edited by McLaren." He added, "We've seen it and there are some scenes -- where we go, 'Oooooh...' But we had to be authentic to what we said the show was going to be about" (MOTORSPORT, 2/14).

Tennis Channel extended its rights agreement with ATP Media to air ATP World Tour Masters events. The new deal gives Tennis Channel live, OTT streaming rights to Masters events, which will be offered through its Tennis Channel Plus subscription service. The network also has expanded VOD rights and network access to classic matches and clips from the ATP Media archive (BROADCASTING CABLE, 2/12).

The Asset OgilvyEntertainment agency extended its broadcast rights deal in Greece and Cyprus for La Liga. The three-year deal will run from '18-19 to '20-21. The agreement incorporates clip rights, a new addition which was not available in the previous package (SOCCEREX, 2/14).

Motorcycle manufacturer Ducati Motor Holding renewed its exclusive global licensing representation agreement with IMG. A number of new licensees are set to launch products in '18. These include Locman watches, an int'l eyewear collection of sunglasses and prescription glasses by Mondottica, an apparel, footwear and accessories collection in India with online retailer Flipkart and niche Ducati wooden balance bikes in Europe and North America (IMG). 

Sports broadcaster SuperSport and South Africa Rugby agreed to "waive radio broadcast rights fees" for Super Rugby for the South African Broadcasting Corp. The announcement comes after the national broadcaster revealed a few days ago that it was "facing financial constraints to acquire the rights to broadcast live Super Rugby matches on its radio channels" (EWN, 2/14).

CONCACAF announced it will "continue to draw upon the services of Solive to drive visibility and engagement around its competitions on social media." The Paris-based live publishing software company will work with the confederation to "distribute content across a range of social platforms," beginning with this month’s CONCACAF Champions League matches (SOCCEREX, 2/14).

Esports event and production company PGL appointed IMG to represent the firm in negotiating and selling its global media rights. PGL has multiple events scheduled this year, including two Dota 2 Majors, each with a prize pool of $1M, as well as the Counter-Strike: Global Offensive invitationals (THE ESPORTS OBSERVER, 2/14).
For more coverage of the business of esports, visit our partners, esportsobserver.com.