The deciding match of the English Premier League season and the final of the UEFA Champions League stoked up the bidding war in the auction for rights still taking place, as both games were settled in dramatic fashion in their final seconds.
With an English club, Chelsea, being victorious in the Champions League, this boosted interest in the league, and therefore increased the perceived value of the rights, which had already attracted greater attention from broadcasters than ever before. The indications are that BSkyB, which has hogged most of the English Premier League rights up till now, will not have it all its own way this time, facing competition from new sources, including the Qatar-owned broadcaster Al-Jazeera, as well possibly as Apple and Google. All of them have pockets deep enough to mount a serious challenge.
For the Premier League, analysts are predicting the publicity boost delivered by the nail-biting finish could add up to £500 million ($800 million) to the value of the rights package currently under auction, compared with what it would have been given an average finish. While this is on the surface bad news for broadcasters, the higher price that will inevitably be paid might just reflect the extra revenues that can be earned from subscriptions, advertising and pay-per-view during the three-year period.
The last rights package for the three seasons 2010/2011 to 2012/2013 went for about £3.5 billion ($5.5 billion) in 2009, including £1.8 billion for live UK rights, £170 million for recorded highlights, and £1.4 billion for overseas rights. The overall rights, covering a total of 138 live matches, was broken down into six bundles of 23 each. Sky took five, and Disney-owned ESPN the remaining one. The new package is slightly bigger because of a few scheduling changes, comprising 154 games in five bundles of 26 and two of 12, with a rule change to prohibit any one broadcaster taking more than 116 games.
This means Sky cannot be quite as dominant as before. However, 116 out of 154 games would still be a big share, and the greater threat comes from the emergence of potential competitors with equal or even greater financial muscle. The auction started on May 3, will end around mid June, and the identify of bidders is secret during the period. But, it is no secret that several powerful candidates have expressed an interest, most notably Al Jazeera, which has transformed from being a controversial pan-Arabian broadcaster to a powerful media company with global ambitions backed by oil-rich Qatar.
Al Jazeera has already outbid incumbent satellite broadcaster Canal Plus for French first-division football rights, but the Premier League is a much bigger and more expensive prize. Al Jazeera may also be put off by the fact there are fewer immigrants from Arab countries in the UK. But, against that is that football figures prominently in the broadcaster’s global expansion plans. Qatar’s wealth has brought the 2022 World Cup to the country despite the climate there being far too hot in summer for football so that the matches will have to be held within air conditioned stadiums.
For Sky, money spent on premier rights has yielded a great return on investment despite the enormous sums involved, since this has been the primary force behind the broadcaster’s success in dominating UK pay TV with around 65 percent of the market at just over 10 million subscribers. But it would face considerable churn if it failed to hold on to its current dominant position and so will be willing to pay more than last time to hold on to it.
The unknown forces are Google and Apple, both of which are aiming to become major players in global TV during the 2013 to 2016 period over which the next rights package runs. Apple was known to be interested, but Google was edging more toward the idea of being a transmission platform for whichever broadcaster does acquire the rights rather than buying them itself.
