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Sky likely to enjoy Bundesliga auction success

Sky Deutschland is likely to succeed at the upcoming Bundesliga football TV rights auction with three to four of the five packages on offer going to Sky, but is likely to have to pay an extra 60 per cent to 80 per cent for the matches, adding a significant cost to Sky-D which up until now has enjoyed exclusive rights to “all the games, all the goals” (as it states on its promotional material).

A report from Deutsche Bank’s equity research team on a Roundtable discussion it held with some key insiders, including William Field who was a former adviser to UEFA and FIFA, came to the conclusion that Sky-D would win three or four of the bundled packages on offer.

The outcome of the auction is expected on June 9.

Under the rules of the auction – unless there is a last-minute change – no single buyer can take all the live rights on offer for the 2017 and onward seasons (to 2021).

The Deutsche Bank report says: “Perform, VOD/KDG were seen as most likely winners of the remaining 1-2 [packages] with an outside risk from Discovery/Eurosport The ‘no-single buyer’ rule, and release of an OTT package if this is breached, was seen as having 2 consequences. Firstly, it incentivises Sky-D not to bid on the weaker packages (group D, in particular) at 1st round.”

“It also encourages SkyD to bid aggressively to avoid the 2nd round & potential [risk from an] OTT scenario. The latter is also reinforced by the 20 percent minimum winning margin requirement. Deutsche Telekom and Vodafone were seen as seeking live rights to leverage better wholesale terms from Sky-D, rather than an outright usurpation. From OTT [bidders]  Amazon was seen as greater risk than YouTube/Google, but neither seen as likely to choose Germany as a launch market for a live rights market strategy.”

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