TV rights for Europe’s big five football leagues are increasingly aligned with their domestic TV market size and fan base size – at least for the time being – according to a report from Ampere Analysis.
The slight drop in the value of the English Premier League (EPL) and the rise of the value of the French Ligue 1 has effectively closed the value gap between the top European leagues – EPL, Serie A (Italy), and Bundesliga (Germany). The cost of the leagues’ TV rights in each of the domestic markets now lies in a very narrow range of between 12 per cent and 15 per cent of each market’s TV industry size. Only Spain’s La Liga is out of step with this trend.
Previous rights values highlighted the uneven relationship of the leagues compared to their domestic markets, with the EPL’s value over-performing relative to the income of UK pay-TV and commercial broadcasting groups, and Ligue 1 and Bundesliga under-performing. Ampere expects TV rights to broadly stabilise at their current proportional values, with Bundesliga having the greatest headroom to grow.
It appears to be a different ball game for second tier leagues, who account for between just 1 per cent to 4.5 per cent of local operator and broadcaster income. By Ampere’s analysis, the Netherlands’ Eredivisie seems the most undervalued league due to a 12-year deal signed in 2013. In the contract, the opportunity for possible rights inflation was sacrificed for funding stability.
However, Ampere’s survey of over 20,000 online users around Europe reveals that the smaller leagues may not be as under-monetised as they initially appear. Although they take in less money from TV rights relative to the size of the TV industry in their markets, their fan-bases are also proportionally much smaller than the ‘big five’ leagues (EPL, Ligue 1, La Liga, Serie A, Bundesliga). For instance, while the Polish first league – the Ekstraklasa – takes in rights revenues of a little over 1 per cent of the Polish TV industry’s turnover (compared to the EPL’s 15 per cent), it also has a much smaller local fanbase – with just 4 per cent of consumers willing to pay for access. In contrast, approximately 15 per cent of UK consumers are willing to pay for EPL access.
When these differences in willingness to spend are accounted for, the pattern becomes very clear. Broadly across Europe each 1 per cent of a country’s population willing to pay to watch a sport equates to TV rights valued at over 0.5 per cent of the industry’s turnover in that market.
Alexios Dimitropoulos, Analyst at Ampere says: “Our analysis suggests that certain leagues and events appear to over- or under-perform relative to the size of the industry and the scale of their fanbases. The Bundesliga in particular is well positioned to improve its rights revenue. It has a relatively modest rights revenue ratio compared to Ligue 1, La Liga and even the slightly deflated EPL. Looking at the number of Bundesliga fans in Germany, the scale of the local TV industry, and the impact of potential new bidders like DAZN or even Amazon, there is potential for significant gains in 2019.”