Premier League rights reach £5.136bn

sanchez-footballThe Premier League has concluded the sales process for the seven packages of UK live broadcasting rights for the three seasons 2016/17-2018/19, with existing rights-holders Sky and BT once again emerging successful and the sums reaching new record highs.

The seven packages – five of 28 matches and two of 14 matches – totalling 168 matches were awarded on the following basis:

  • Sky has secured packages A, C, D, E, and G totalling 126 matches.

  • BT has secured packages B and F totalling 42 matches.

The overall value delivered for the seven packages, following an open and independently scrutinised sales process, is £5.136 billion (€6.93bn).

Premier League Chief Executive, Richard Scudamore, said: “Premier League clubs deliver competitive and compelling football to fans in stadiums and on television, driving interest levels to new heights. Last season saw record levels of attendance with the highest top-flight crowds since 1949/50, as well as increased viewing figures across all our UK rights holders. Both Sky Sports and BT Sport have done a tremendous job in bringing the game to the fans as well as providing the revenue that allows clubs to invest in football, facilities, youth development and their communities.”

He said it was an endorsement of what the Barclays Premier League delivered that these broadcast partnerships had been extended and enhanced. “We are grateful for the continued belief that Sky Sports and BT Sport have in the Premier League and our clubs, both as a sporting competition and organisations to work with. We are also grateful to the significant interest and participation in the process from other highly credible parties.”

According to Scudamore, the outcome provides a degree of certainty so clubs can continue to invest and run themselves in a sustainable manner; it also allows us to start planning how the Premier League can continue to support the rest of the football pyramid from the grassroots upwards.

“This structure also allows us to strike a balance between match-attending fans and those who choose to watch on television. Keeping grounds full is a priority for the Premier League and our clubs, and I am sure the flexible ticketing policies that have helped keep attendances so high will continue to develop. Although we have had a successful outcome for this process, following on from the highlights’ award, there is still the ongoing Ofcom investigation to be concluded. We remain confident that the Premier League’s live UK broadcasting rights are sold in a way that is compatible with both UK and EU competition law as well as being of great benefit to the whole of English football,” he concluded.

Sky claims it has strengthened its position as the home of sport and unrivalled choice for sports fans by winning the rights to 126 matches.

Sky will pay £1,392 million per annum for each of the three years of the new agreement, representing an 83 per cent increase over the cost of the existing contract.

Sky says it will bring viewers three times as many live matches as any other broadcaster, including the best match picks and the most-watched slots in the schedule. By securing the rights to matches on Friday evenings for the first time, Sky Sports says it will also bring viewers an entirely new way to start the weekend with live Premier League football.

The price paid per annum is around £330 million more than analysts’ forecasts. Sky has a clear set of plans in place to fund the bid and deliver its financial plans in line with expectations. The company will work hard to minimise the impact of higher rights costs on customers, with the majority of the funding coming through substantial additional savings to be delivered by efficiency plans.

Jeremy Darroch, Sky’s Group Chief Executive, said: “This is a good result and confirms that Sky is the unrivalled choice for sports fans. We went into the Premier League auction with a clear objective and are pleased to have secured the rights that we wanted. Our strong performance across the board gives us financial strength and flexibility. We have a clear plan to absorb the cost of the new Premier League deal while delivering our financial plans.”

Barney Francis, Managing Director of Sky Sports, added: “We are looking forward to bringing even more live Premier League football to viewers. Only Sky Sports will have the best match picks and the best slots so our viewers will be able to follow the biggest matches, the key head to heads and every club at least four times. No other broadcaster comes close,” he averred.

BT’s success in winning two packages means it is to show even more live top-flight football matches on its BT Sport TV channels, an increase of four matches per season on the current 38.

The new rights will see BT Sport show a live Saturday evening game every Premier League weekend from 2016/17 for three seasons. This will allow BT to build on its current Saturday programming and appeal to an even larger audience, having secured the prime evening TV viewing slot.

These new Premier League games from 2016/17 will be added to the 350 exclusive live matches from the UEFA Champions League and Europa League that BT Sport will be showing from both tournaments starting this summer. The channel also has live rights to the FA Cup for the next three years.

John Petter, BT Consumer CEO said: “I am pleased we will be showing Premier League football for a further three years and that we have secured the prime Saturday evening slot. These new rights will enhance our existing schedule of football, rugby and other international sport, including all the live footballing action from the UEFA Champions and Europa Leagues starting this summer. BT Sport has got off to a strong start, reaching more than five million households and commercial premises, by making itself far more affordable and accessible to sports fans.”

BT Sport was launched in August 2013, when BT made it available to its consumer broadband customers for free. More than three million households have access to BT Sport, a number that rises to more than five million when wholesale deals are taken into account. More than 25,000 commercial premises, including 30 per cent of all UK pubs, also have access.

BT Sport is available via BT TV, Sky’s satellite platform and via the BT Sport App. Virgin Media customers can also access the service. Audience figures continue to grow, with Premier League viewing on BT Sport up 17 per cent so far this season.

The rights will cost £320 million per season compared with £246 million per season at present. On a per game basis, this equates to £7.6 million per game, an increase of 18 per cent on the £6.5 million per game currently.

A deposit of around £29 million is payable this month followed by six instalments starting in July 2016 and continuing in the months of December and July until December 2018.

The launch of BT Sport has supported the financial performance of BT Consumer by reducing churn, attracting new customers and encouraging existing customers to take more BT products. BT Consumer has now grown its revenue and profit for four consecutive quarters, following the launch of BT Sport.

According to Paolo Pescatore, director of multiplay and media at CCS Insight, there is only one real winner from the rights auction, and that is the Premier League. “For a similar rights portfolio as before, but with a phenomenal increase in spend, these huge sums clearly show the importance of this rights auction to BT and Sky as part of their own aspirations in multiplay,” he advised.

 

“It made sense for BT Sport and Sky to come out on top. Any new entrant would have disrupted the market and meant that users would have to take out three separate subscriptions while also being a severe dent to BT’s own aspirations in this area. Though BT has secured a broad portfolio of rights focussed on European sports, this is a dent to its own aspirations to attract Sky households; who clearly have a strong appetite to watch Premier League football,” he observed.

 

“Sky has shown that people are willing to pay for live sport and it will continue to be a battle ground for multiplay providers in the year to come. Given the ever escalating cost of content rights, we would expect consumers to pay more to watch football on the big screen,” he suggested.

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