Bank questions Premier League PPV move

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As has been widely publicised, the Premier League (EPL) is to offer some games on a PPV basis for £14.95 per game. The news has provoked concerns from fans, but also the industry.

A report from investment bank Exane/BNPP reminds clients of the rationale behind the decisions which mean that games not already picked to be shown live (by Sky or BT) will be available on BT Sport Box Office or Sky Sports Box Office. The Premier League clubs see the “interim solution” as a way for people to still watch their teams during the pandemic, since stadium attendance is prohibited, says the bank.

“This raises an interesting hypothetical – why doesn’t the EPL offer a direct-to-home streaming service instead of selling rights to other companies? Sky’s football audience is about 7 million homes, with a further 1.7 million on BT Sport. The clubs generate around £1.6 billion per year from the rights today. If they were to offer a comprehensive live streaming solution, priced at £14.95 per month onth [not per game], which offers the subscriber the option to watch each and every one of the 380 games per season live (not an option available today), they could expand the audience compared to the current pay-TV solution,” suggests the bank’s note.

The bank adds: “However, even assuming a 50 per cent increase in audience size (to about 11 million homes) vs Sky, this would generate £1.6 billion/year from subscription revenues ex-VAT, a further £0.5 billion from ad/placement revenues giving a total net revenue of £2.1 billion. Less platform and production costs this is likely break even with the current £1.7 billion per year generated by clubs from the pay-TV deal.”

“The clear risk for the clubs is that they would need to execute and show that they can expand the audience, in addition to creating a viable platform and service. The other risk, of course, is cannibalising match day revenue streams and this move inviting regulatory scrutiny. So, the option is not immediately attractive unless there is sufficient confidence in reaching 11 million+ homes (for reference Netflix is estimated to have around 13 million+ subscribers in the UK, with a minimum price of £5.99 per month),” states the bank.


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