SBC News Voice of the Sports Betting Industry
In six months time the greatest, and most lucrative, TV rights battle will begin as various parties vie for the right to broadcast matches from the golden goose that is the Premier League.
The current deal runs until the 2015-16 season, and when the auctions begin early next year firms will bid for various packages featuring three year contracts. These will begin at the start of the 2016-17 season. The winners will be announced in March 2015.
It is possible that Sky will have yet more competition, as in addition to BT, some quarters believe that the likes of Google and Apple may aim to become involved. This is something which was discussed ahead of the last bidding war however, and nothing came of it.
Regardless, it is most likely that it will essentially remain a tug of war between Sky and BT, with the aggressive determination of the latter expected to see the prices shoot up to beyond the £4bn mark.
Will Apple join the bidding for Premier League broadcasting rights?
This would equate to a valuation of at least £7m per Premier League match. The financial rewards offered to clubs who make it into the top flight would justly increase, with survival ensuring a windfall of £100m.
At present, there are seven packages of which Sky controls five and airs 116 games per season, and BT the remaining two meaning it broadcasts 38.
Its recent acquisition of Champions League coverage provided yet more evidence that BT does not plan to accept the status quo with Sky the sole major player. They paid £897m for a three year deal which begins next season. It is expected that they will fight tooth and nail in the upcoming bidding war.
“BT know that they must increase its match allocation to be taken really seriously,” an industry insider told us. “They have put a marker down by the paying a huge amount for the Champions League rights now it has to follow that up.”
Price of football
It’s somewhat poor timing for this information to be released, as the BBC announced the results of its most recent Price of Football investigation, which stated that ticket prices have risen at almost twice the rate of the cost of living since 2011.
This has led to widespread complaints, with critics highlighting the previous TV rights windfall as evidence that prices should have dropped rather than risen for fans. The announcement that it’s set to increase drastically once again will only add fuel to the fire.
In 1992, then CEO of the Premier League, Rick Parry, stated that selling live broadcasting rights to the league would help keep ticket prices down for fans. What he may not have anticipated however is the staggering rise in wages, transfer and agents fees. Clubs themselves, and those in their defence, have pointed out how running a football club is equally more expensive than ever. To compete in the Premier League you need either a billionaire backer, or methods by which to generate the funds to attempt to compete with those who do.
The BBC released statistics in connection with their Price of Football investigation which noted that Man Utd would need to sell 75,715 pies to pay Falcao’s weekly wage, whilst Real Madrid would have to sell 1,281,358 shirts to recapture the transfer fee spent on Gareth Bale.
Comparison to other leagues
- Premier League – £3bn
- Serie A – £721m
- La Liga – £511m
- Bundesliga – £417.4m
(NB… Data for the most recent deals, and those currently in place in 2014)
This league table of the TV rights package value across Europe’s top four leagues shows how in terms of revenue, the Premier League is worlds away from even its closest competitor in this category; Serie A.
Moreover with the forthcoming deal expected to see another billion added to that total, the gulf is widening. The value of TV broadcasting rights should increase across the board, with La Liga for example hoping to increase their revenue to around €1bn (£792m) by 2017. Though these increases cannot hope to match the stupendous figures now demanded to air matches from the world’s most watched league.
This is what it boils down to after all; who’s watching worldwide. A survey in 2011 calculated that the Premier League had a global audience of 12.3m people worldwide per match on average. The Bundesliga meanwhile had 2m, Serie A had 4.5m and La Liga had 2.2m, meaning the combined total of these three is still less than the Premiership.(http://bleacherreport.com/)
The Asian market is seemingly where the Premier League wins out, with clubs such as Manchester United and Liverpool enjoying an obsessive and widespread fanbase there. In addition to this the typical times of Premier League matches make for comfortable and accessible viewing times for much of Asia, those in La Liga and Serie A do not.
Whatever the reasons for the huge gap in TV revenues, one thing is certain; the other top leagues in Europe will not be catching up anytime soon.
Origins of TV rights and British football
In 1937 the BBC made history by live broadcasting the UK’s first televised football match. It was an encounter between Arsenal and Arsenal Reserves at Highbury, one which was specially arranged I might add
It was not until many years later and the dawn of the new era; the Premier League in 1992, that money first changed hands for the right to broadcast matches. The initial deal was worth £304m, and Sky Sports broadcast the first live match between Nottingham Forest and Liverpool. Two years later, they also acquired the rights to air the Football League, the League Cup and the Scottish Football League.
Twenty-two years later and, whilst they no longer monopolise the market, they’re still very much the major broadcaster. Come March however and this long-lasting relationship could begin to fizzle out. It seems inevitable that new kid on the block BT will flex their financial muscle and cut themselves a bigger slice of Premier League pie. The time has come for Sky to show just how much the Premier League means to them, and it’s going to be costly.
