Amazon and BT pick up Premier League's unsold rights packages
By Martin Ross
Amazon, the online retail giant investing in sports content, has landed one of the Premier League’s two remaining domestic rights packages in the UK, with incumbent rights-holder BT Sport, the pay-TV broadcaster, picking up the other package from 2019-20 onwards.
In acquiring Package F, Amazon has secured rights to 20 matches per season played across a Bank Holiday weekend and one midweek fixture programme, along with weekly highlights to be shown throughout the season.
BT Sport is to pay £30 million ($40.4 million) per year for Package G, which comprises 15 matches from two midweek fixture programmes and five games from a split weekend, allowing the telecoms operator to show multiple midweek games on the same evening.
The acquisition takes to 52 the number of games BT will show from 2019-20 onwards and ups its rights spend to £975 million over three years, having already landed a package of rights in the Premier League’s initial rights auction earlier this year.
Some 160 live matches were sold in the Premier League’s sales process in February when the league generated a total of £4.464 billion – or £1.488 billion per season - from deals with pay-TV incumbents Sky (four packages) and BT Sport (one package).
Amazon’s swoop for rights means that Premier League fans wanting to see all games live will have to subscribe to three different services in the latest example of market segmentation hitting customers in the pocket.
The online retail group has already secured top-tier sports content for its Amazon Prime Video service, landing rights in the UK to the ATP World Tour from 2019 in a deal worth up to £10 million per year, along with rights to tennis US Open.
While the Premier League will face criticism for a drop in domestic rights value, executives from the English top flight and its clubs will believe that they have succeeded in laying the foundations for a more competitive environment for the next rights auction, while also being able to experiment with an OTT offering.
Richard Scudamore, the league’s executive chairman, said today: “Sky and BT are established Premier League partners and provide first-rate coverage of the competition through their live-match broadcasts and comprehensive programming. We welcome Amazon as an exciting new partner and we know Prime Video will provide an excellent service on which fans can consume the Premier League.
“The interest in our UK rights is testament to the fantastic competition delivered by our clubs. This outcome will support their continued efforts to put on the best possible football and use their popularity and reach to have a positive impact on the sport and beyond.”
BT has succeeded in adding 10 games per season to its current Premier League output with the appetite from Sky thought to have been limited. The latter recently lost its rights to Spanish soccer’s LaLiga, and has been placing a heightened focus on its Ebitda margin with a view to maximising its acquisition price in any takeover deal by 21st Century Fox or Comcast.
While BT Sport could have bought both remaining packages, Sky could only have acquired one as any broadcaster was limited to a total of 148 matches.
Sky is paying £3.579 billion of the total for the new cycle, having purchased rights to 128 games a season, up from 126 matches currently, and having heralded its “16-per-cent cost reduction per game versus the current agreement.”
Eleven Sports, the international pay-TV broadcaster that is launching in the UK and Ireland after ousting Sky as the LaLiga rights-holder, is not thought to have targeted the remaining Premier League rights packages.
An increase in the value of international rights, which are worth around £3 billion in the present three-year cycle cycle, could help to compensate for any fall in the domestic market between 2019-20 and 2021-22.
• The Premier League clubs have finally reached agreement on a new formula for the distribution of international television rights turnover.
Under the present system, these revenues are split equally between the 20 clubs, and this principle will be maintained for current levels, but with any increase distributed according to final league positions.
The change, which comes into effect for the 2019-20 season, will satisfy the demands of the bigger clubs, which had been pressing for a greater share of overseas rights money on the basis that they attract the largest TV audiences.
The Premier League said today that the new formula caps the ratio between the maximum and minimum amount a club receives in central revenues at 1.8:1. This compares with the 1.6:1 ratio that applied in the recently completed 2017-18 season.
If future revenues rise to the point where the cap is reached, any additional income will be distributed so the 1.8:1 ratio is respected.
Until now the ‘big six’ Premier League clubs of new champions Manchester City, Manchester United, Tottenham Hotspur, Liverpool, Chelsea and Arsenal had been unable to convince enough of the other teams to support a change to the distribution system for international rights revenues. Any change to Premier League rules requires the support of 14 of the 20 clubs.
Once deemed negligible, these revenues have surged given the global interest in the Premier League and its international stars, and Liverpool’s US owner John Henry expressed frustration at the equal split only this week, saying the top clubs were “subsidising competitors.”
Welcoming today’s settlement, Scudamore, who had been striving to broker an agreement between the clubs, said: “When the Premier League was formed in 1992 nobody could have envisaged the scale of international growth in the competition which exists now. Back then the clubs put in place a revenue sharing system that was right for the time and has served the League well, enabling them to invest and improve in all areas.
“This new agreement will continue that trend with a subtle change that further incentivises on-pitch achievement and maintains the Premier League’s position as the most equitable in Europe in terms of sharing central revenues. By coming together and agreeing this change, the clubs have provided a platform for the future success of the League for many years ahead.”