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New players traditionally find the going prohibitively difficult, with surprise entries like Setanta Sports, who made an initial splash but failed to make it pay and withdrew soon after. And with new digital players threatening to challenge everything we know about watching football on TV, this year’s auction could be one of the most interesting since Sky gazumped the market in the 1990s.
But who is the smart money on? What are the potential team line-ups? How will this impact on the wider TV Broadcast market for sporting rights? As Head of Broadcast in Bray Leino’s Media team, I’m responsible for our Clients’ broadcast media strategy and buying. So this triennial top-table clash is a good opportunity to make some informed touchline assessments on how it could all play out.
The league leaders: Sky & BT
Seven years ago, Sky had the pick of the TV rights. With their subscription / advertising hybrid model they could squeeze far more value and pay more than the competition. But with Netflix now putting pressure on Sky’s low-to-mid value customer base, the world doesn’t look as rosy as it once did.
With Sky moving aggressively on its Broadband business, BT was caught between a rock and a hard place and came out fighting, aiming to mimic Sky’s model, and pushing the prices up significantly across the last two auctions.
In 2015, between them they secured the lion’s share of Premier League packages. Sky paid £4.2bn, with BT shelling out £960m.
Premier League is fundamental to both businesses. BT Sport now have a few years’ experience, and their increase in subscriber fees shows that they’re serious about making the venture sustainable.
Both players seem keen to slow the rapid increase in costs their battle has driven over the past seven years, and a recent thawing of relations will see each broadcasting the other’s matches from 2019.
This should be welcomed by viewers; having two major players in the game has hit them in the pocket, and both Sky and BT need to be careful. Consumers have a breaking point, and there’s increasing choice in how and where they consume their live sport.
Sky are still the title favourites, and having potentially signed the financial muscle of Disney, the smart money is on them to secure the majority of rights. BT will likely retain a collection of the smaller packages.
The sleeping giants: Google & Facebook
These global tech players are without doubt part of the conversation going on in the dressing room, but I see long odds on any bids coming in from these two.
Without the retail model of Amazon behind them, relying on advertising alone gives them the same problems as the terrestrial TV players in returning the investment on high-end rights.
Of the two, Facebook has splashed cash on senior hires and committed a healthy budget ($6bn) towards growing its live sports offering. But I can’t see them willing to throw this into one small territory where they already enjoy significant penetration.
If Facebook table a bid, it’s likely to involve international rights in a territory where it’s targeting increased market share. Or, more likely, it would look elsewhere for cheaper rights on niche sports with general appeal on a global or continental level.
In Google’s case, their YouTube platform hosted Champions League matches last year in order to boost BT’s reach and keep UEFA happy. They could look at a freemium model for the rights, with some games hosted on YouTube to provide the reach, and others for sale in the Google Play store. But it doesn’t feel like a smart bet to me.
The outside bet: Discovery & Eurosport, or Al Jazeera
Discovery and Eurosport secured a territory deal to the Olympics, so why not the Premier League? It would make sense as a strategy to help protect carriage fees or solus subscriptions on Eurosport Player.
Al Jazeera was the money bet last time round but hasn’t been mentioned in the build up to this auction. Unlikely, but if you fancy an outside bet, they could be this year’s Setanta Sports.
The relegation scrap: ITV/ C4 / BBC / Five (Viacom)
These days, terrestrial TV ambitions start and end at Crown Jewel sporting events, namely The FA Cup, Commonwealth Games, London Marathon and Olympics Games. Otherwise, their business model sees them in the lower leagues of secondary rights and less expensive sports.
However, expect to see more cross over deals as sport governing bodies look to find the balance between exposure and monetary maximisation, a space that the tech giants could also look to try and play in.
The disruptive billionaire newcomer: Amazon
Of the various big digital players toying with the idea of significant rights acquisition, Amazon seems the best placed.
The value of customers to Amazon increases considerably when they sign up to Prime. Alongside their growing content streaming business, which already includes several live sporting events, advertising opportunities and data from their vast retail site, supermarkets, and Internet Of Things voice platform, aka Echo and Alexa, Amazon are certainly primed as the only player able to compete with Sky on extracting sustainable value from Premier League rights.
However, this year’s auction may have come too early for the notoriously cautious business to jump in two-footed. Amazon’s business decisions are driven by data, and while it’s made investments in live streaming tennis and a content partnership with Manchester City, these moves are too recent to have produced any significant insight.
I’d put a bet on Amazon testing the water this time around with one or two of the smaller packages. If the data shows they can make it work, expect them to bid for majority rights in the future.
If they were, unexpectedly, to table a huge bid and win the rights, it changes the advertising landscape considerably. Would Amazon Prime Premier League Football offer immediate advertising options? Possibly not, at least in the short term – but I’d expect to see Alexa integrated drone delivery of beer and snacks before kick-off in the near future.
Kieren Mills is Head of Broadcast at Bray Leino - to find out how our media team can help you reach the audiences you need, get in touch with Austen Donnellan.