Advanced Television

Sky and BT pay £4.5bn for EPL rights

February 14, 2018

Sky and BT Sport have agreed to pay £4.464 billion (€5bn) for Premier League games for three seasons from 2019-20. Five of seven live packages have been awarded, with bidding for the remaining two ongoing.

Interest from “multiple bidders” remains, the Premier League said – there had been speculation FAANG (Facebook, Amazon, Apple, Netflix, Google) companies could have entered the bidding process.

BT Sport has won the rights to broadcast 32 matches per season on Saturdays at 12:30 – a TV slot it currently holds.  Sky Sports is to broadcast 128 games per season, including 32 matches on Saturdays at 17:30.

“We are extremely pleased that BT and Sky continue to view the Premier League and our clubs as such an important part of their offering,” Premier League Executive Chairman Richard Scudamore said.

“Both broadcasters are fantastic partners for the Premier League and have a track record of making our competition available to fans across the country through their high-quality and innovative programming.

“To have achieved this investment with two packages of live rights remaining to sell is an outcome that is testament to the excellent football competition delivered by the clubs.

“It provides them with certainty and will underpin their continued efforts to put on the most compelling football, invest sustainably in all areas, and use their popularity and reach to have a positive impact on the sport and beyond.

“We will now continue the sales process to deliver the best possible outcome for the remaining packages of rights in the UK and throughout the rest of the world.”

Sky said it had chosen to pay £1.193 billion per annum under the terms of the new deal, down £199 million per annum, a 16 per cent cost reduction per game versus the current agreement.

Sky has acquired the following rights between 2019/20 and 2021/22:

• The biggest head to heads with every weekend ‘first pick’ and 14 ‘second picks’

• The best slots including Saturday tea time matches, Super Sunday, Monday Night Football and Friday Night Football

• For the first time, Saturday evening matches

Sky says the agreement strengthens its position as the best provider of the broadest range of content, which includes ten channels of sport covering live Premier League, English Football League, Scottish Football, exclusive coverage of Formula 1 from 2019 to 2024, plus England cricket through to 2024.

Stephen van Rooyen, Sky’s UK Chief Executive, said: “We continue to invest in content that our customers value and which complements our strategy to broaden our offer. Not only do we remain the home of Premier League football but also the home of top quality drama, entertainment, comedy and other sports. Our disciplined approach means we continue to have the flexibility to invest in each of these areas as we choose, underlining our position as Europe’s largest investor in content.”

Barney Francis, Managing Director of Sky Sports added: “Sky Sports customers will continue to enjoy unrivalled Premier League coverage through to 2022 with 128 live matches a season from next year – more than ever before – including the key head to heads in the best slots and, of course, analysis from the biggest names in football.

“This comes on the back of recent renewals for EFL, ECB and exclusivity for F1, all of which will be available to our customers until 2024.”

BT said it had remained financially disciplined during the auction process and remains in a strong position to make a return on its investment through subscription, wholesale, commercial and advertising revenues, especially following the acquisition of EE, which more than doubled BT’s customer base.

BT recently agreed a multi-year agency deal to market and sell Sky’s NOW TV service to BT customers, which includes Sky Sports, from early 2019.

Marc Allera, chief executive of BT’s Consumer division, said: “The Premier League is undoubtedly the most competitive and exciting domestic league in the world, so we’re delighted that our customers will be able to continue enjoying Saturday games on BT Sport.

The Premier League is a big part of our live sport line-up, which includes the UEFA Champions League and UEFA Europa League, the Emirates FA Cup, MotoGP, boxing, Aviva Premiership rugby and European Rugby Champions Cup.”

“BT Sport is enjoyed by over five million households and pubs and clubs across the UK. We are excited about the opportunity to bring this great content to even more TV and mobile customers as we pursue our strategy of being the best provider of converged network services in the UK.”

BT says it has made top tier sport far more affordable in the UK in recent years. BT TV customers can access all of the action on BT Sport from just £3.50 a month.

The channels are available via BT TV and the BT Sport App, to EE customers, on the Sky platform and to Virgin Media customers. Audience figures continue to grow on BT Sport, with average viewing up 23 per cent year on year in the last quarter, its best performance since launch in August 2013.

The rights will cost £295 million per season. A deposit of £26.5 million is payable this month followed by six instalments of around £145 million starting in July 2019, payable every six months until December 2021.

BT notes that the auction remains ongoing and confirmed it would continue to engage with the Premier League regarding the remaining rights.

“As we predicted, there was only one likely scenario, the status quo,” noted Paolo Pescatore, Vice President, Multiplay and Media, CCS Insight. “And this is a huge sigh of relief for both BT Sports and Sky Sports.”

“This is great news for consumers as they will not be forced to sign up with another provider to watch football. It is already challenging to sign up to both BT Sports and Sky Sports, but had an online giant got involved that would have meant another billing relationship and destination – what a mess for consumers!”

Two 20-match packages are still unsold – probably because the clubs have not achived a reserve price. These could be awarded to Sky or BT, another bidder, or be retained by the Premier League to be sold via its own service.

According to Tim Westcott Director – Research and Analysis, Programming, IHS Markit, the outcome so far of the auction for highly-prized Premier League rights will be relief for the incumbents Sky and BT. “The rights are the keystone of their pay TV businesses, and a loss would certainly have met with a negative reaction from the UK stock market tomorrow morning. They have also seen off the prospect of a challenge from a newcomer like Amazon or Google – even though this prospect was more a case of hype than expectation, as we said in our report earlier this month.

Despite the lower payments by both parties, the auction is not a bad outcome for the clubs.The Premier League will remain one of the sports rights holders most lavishly awarded by TV partners despite the reduction in payments per match, despite a decline in TV  audiences for live games in recent seasons and the heavy investment by Sky in original scripted programming.

Nevertheless, the League would have been delighted to have pulled a bid from one of the US techno-giants out of the hat. It may still be able to do so with the two packages still to be awarded. We will add further analysis shortly.

Despite more games being available, the Premier League has failed to maximise its prized asset. This suggests that there is clearly a ceiling that consumers are willing to pay for watching Premier League games and subsequently what providers’ are willing to bid for.”

“Although Sky will continue to spend eye-watering sums of money on live Premier League rights, it has managed to tighten its grip on them – with not only the lion’s share but now first-pick matches every weekend under the new deal – for a lower price than it is currently paying,” added Westcott’s colleague, Ted Hall, Research Director, IHS Markit. “Of all the feasible outcomes Sky would have anticipated in its scenario planning for this auction, the deal it has secured has to be considered the best possible result.

Conversely, BT’s agreement to pay close to what it currently does for live Premier League rights, but for less matches and no first-picks, is less cause for celebration. The telco may yet secure some or all of the remaining rights up for grabs, but doing so would see its Premier League rights spend inflate to levels that would likely make shareholders uncomfortable.

BT’s need to differentiate through sport has been reduced, though, thanks to the reciprocal wholesale channel-sharing agreement it struck with Sky in December. This ‘truce’ deal, which was tactically timed to take the edge off the competition between the two pay TV rivals in this auction, is the central factor in the overall decline in the value of the rights sold so far – a far cry from the 70% price hikes the Premier League enjoyed in each of the last two cycles.

As IHS Markit expected, competition from the big tech firms for the main season-long packages failed to materialise. And their enthusiasm for the two remaining packages, which were designed to appeal to streaming players, is apparently not as high as the Premier League had hoped, with the reserve prices reportedly not met. Nonetheless, this does not mean that Amazon or Facebook will not eventually emerge as the league’s first tertiary rights holder – though the level of disruption they can achieve with just two or (maximum) four gameweeks’ worth of coverage will certainly be limited.”

Tom Mockridge, CEO of multiplay operator Virgin Media said: “With it looking like more games will be sold at a cheaper per-match price, Virgin Media’s hard-fought campaign to tackle the rising cost of TV football rights has worked. This kicks the ball in the right direction for football fans.”

In September 2014 Virgin Media made a formal complaint to Ofcom about the Premier League auction and the number of live Premier League games shown on TV. Currently only 168 matches are shown on TV out of a total of 380 matches played each season.

In November 2014 Ofcom launched an investigation and for more than two years Virgin Media campaigned for #MoreBalls – calling more live games to be shown on TV so that fans could enjoy more of the football action. The Premier League allows broadcasters across the world – from Algeria to Iran – to televise all games live on TV. But not in the UK – the home of football.

In August 2016 Ofcom ended its investigation, with the Premier League agreeing that at least an extra 22 matches will be shown live on TV for the start of the 2019-20 season (a total of 190 games). This amount was then increased to 200 live games.

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