Premier League's UK rights value 'to fall by 20 per cent and Champions League by 40 per cent'
English soccer’s Premier League is facing a 20-per-cent drop in the value of its domestic television rights after the next round of negotiations for new deals with incumbent broadcasters Sky and BT Sport, a leading analyst has warned.
Speaking at the FT Business Summit, Claire Enders of Enders Analysis also predicted that the value of Uefa Champions League rights, presently held exclusively by BT Sport, will fall by as much as 40 per cent.
Enders told the conference: “I would confidently predict a 40-per-cent decline in Champions League income in the UK rights. The drop in PL auction will be a 20-per-cent decline. My advice to clubs would be: cut your wage bill.”
The warning came after it emerged in February that the Premier League was mulling launching a so-called ‘Netflix of football’, an over-the-top streaming service that could eventually by-pass the pay-TV broadcasters that have been its traditional partners in delivering the league to viewers worldwide.
A trial of such a service was planned for Singapore, but was eventually shelved in favour of a new, three-year pay-TV deal with Singtel, the telecoms group. It is understood that an OTT service was considered to be a realistic proposition, but that the clubs eventually opted for the Singtel offer.
The value of the league’s domestic live rights has increased from £670 million (now $858 million) in the four years from 1997-98 to 2000-01 to £5.14 billion in the three-year cycle that concluded at the end of this season.
However, there has been a slight fall in the value of the domestic live rights, awarded to pay-TV’s Sky and BT Sport, plus internet giant Amazon, in the next cycle, from 2019-20 to 2020-21, to below £5 billion, albeit the difference is expected to be more than compensated for by an increase in international rights revenues, which are presently worth £3.3 billion over three years.
There were hopes that third-party streaming services such as Netflix, Amazon or Facebook could take over from the pay-TV broadcasters, but Peter Hutton, Facebook's director of global sports partnerships and programming, warned the conference yesterday: “I don't think we will be a magic fairy to arrive with cash and distribute generally. We will have a major say in how sport is consumed, though.”
Richard Masters, the interim chief executive of the Premier League, following the departure of long-time chief Richard Scudamore, insisted that international rights will help offset the decline in the league domestic rights in the present round of negotiations for the 2019-22 cycle, saying: “Our international markets will be up around 30 per cent. This will allow the Premier to grow.”
In March, the league was reported to be close to finalising overseas rights deals for the 2019-22 cycle which will be worth in the region of £4.05 billion, up 25 per cent on the £3.3 billion in the current cycle.
The Premier League is set to bring in a total of around £9 billion in media revenue in the 2019-22 cycle, up from £8.6 billion in the three-year cycle just ended, the Daily Telegraph reported.
This will mean that overseas rights will account for 46 per cent of media turnover, compared with 39 per cent at present and just 11 per cent back in 2001-04, and on course to overtake domestic rights in the 2022-25 period.
Meanwhile, in March 2017, BT Sport paid what some observers regarded as an over-the-odds 32-per-cent increase in fees to acquire exclusive rights to the Uefa Champions League and Uefa Europa League rights until 2021.
The telecoms giant acquired exclusivity across all live games, highlights and in-match clips of both competitions in its three-year contracts for 2018-19 onwards.
Having invested £897 million ($1.1 billion) in the rights for the previous cycle, BT is paying £1.18 billion – or £394 million per season – from 2018-19 to 2020-21.
The exclusivity secured by BT means that there is no free-to-air coverage of either competition on the UK’s free-to-air terrestrial broadcasters, with the telecoms group instead using social media platforms to make weekly highlights, the magazine programme, clips and both finals available on a free-to-view basis.
Questions have been raised about BT Sport’s continuing appetite to strike such mega-deals in future, however.