tv rights

Premier League Football Rights – Addendum

Four months after the winners of the main TV packages for the 2019-2022 Premier League domestic football rights were announced, the final two packages have now finally been sold with Amazon and BT picking up the “remnants.”

First a reminder that previously Sky and BT essentially maintained the status quo in this rights period, while managing their costs. Cumulatively they were paying around £600m over three seasons less than they had previously, with the proviso that the final two packages remained unsold.

Why didn’t those two packages get sold first time around? Essentially, the Premier League’s reserve price was not met. That wasn’t surprising since the packages were poorly conceived, offering multiple matches on a single date meaning that one broadcaster couldn’t maximise the number of potential viewers. Yes, digital technology means that viewers can select what they watch – as we see during early rounds of European club competitions – but they offer a limited number of viewing opportunities.

While the packages haven’t been enormously tweaked since those reserves weren’t met, there is one noticeable change in the new format.

BT has bought Package G which is now 15 fixtures from two midweek fixture programmes, and five matches from the “split weekend.” The “split weekend” is a single weekend’s worth of fixtures spread over two consecutive weekends allowing for a short mid-winter break in upcoming seasons. In effect 10 teams will get a ‘bye’ one weekend, and the other teams the following weekend. That allows for the thick end of two weeks’ break for players of any given club. But it also means that viewers get football every weekend during the “break.”

BT’s five fixtures from that split weekend won’t be simultaneous, so they get a decent bite of the cherry with them. The other 15 fixtures are more complicated. Assuming that midweek fixtures are spread over two nights – Wednesday and Thursday – it means BT would be looking at 3-4 games per night during those midweek rounds. The issue here is that a viewer can really only watch one of those games, assuming the Premier League doesn’t start having kick-offs at 6pm as per the Europa League. Furthermore, some of those games will be ‘unattractive’ to mainstream viewers and therefore unlikely to have been TV picks previously.

BT is paying £90 for these 20 games – or £4.5m a game. That’s significantly down on the £9.2m a game it was paying for its other package. But it bolsters BT’s Premier League offering, enabling it to promote 52 rather than 32 fixtures, so it makes some sense.

Amazon is more complicated. I have not seen any reports on how much Amazon has spent, but it would surely be much less than the £90m BT is spending, since it has bought Package F, with games from one Bank Holiday and one midweek rond.

While the Bank Holiday games could be spread out into as many as four time periods – e.g. kick-offs at 12pm, 3pm 5:30pm and 8pm – a further six games from the round would be played simultaneously with other fixtures. And even the most die-hard fan is unlikely to stay glued to their sofas for four consecutive matches.

With the midweek round, it’s again hard to see how a viewer can see more than two fixtures – one on Tuesday and one on Wednesday. The remainder will need to be played simultaneously.

In both cases, some less glamorous games will be included, so the rights fee should be lower – in the £50-60m range I would guess. That leaves the Premier League with perhaps £450m less over three seasons than previously.

As I said previously, when I mused on Amazon buying rights, I could envisage a sales push from Amazon with something like: “Buy a Fire TV stick this Christmas and get free access to Boxing Day football – only with Amazon.”

But this is a marketing challenge for Amazon. They have games on only three dates within the season. So they’re going to have to spend a lot on advertising to reach viewers for such a short period.

The Premier League was desperate to get a digital player like Amazon on board, because since there’s no obvious competitor to Sky or BT right now, they need deep-pocketed global players like Amazon to come in and shake things up (aka spend even more cash!). But if Amazon bid for the bigger packages, they didn’t go high enough, and global operators like them or Facebook really want global rights. Given the value of Premier League football, it’s probably still a better business model for the league to sell rights on a territory by territory basis. Sum of the parts is worth more than an Amazon whole.

That may not remain the case forever, but aside from the prestige in owning the rights, there has to be a business model where it makes sense for Amazon or another digital giant to buy these rights. And I’ve struggled to find one. That said, Facebook did bid for Indian Premier League rights. They didn’t win, but those rights might make more sense since India is probably still a growth market for Facebook. Is there anyone left in the UK who might use Facebook that isn’t using it? (It’s true that post Cambridge Analytica, a bigger issue for Facebook in the future might be retention of some of those users.)

I’m certain that next time around, we’ll get a different set of TV packages that makes more sense to more broadcasters and digital operators. I’ve argued all the way along that these were badly formulated and indeed were a misreading on the Premier League’s behalf.

I will be interested to see who gets mobile goal flash digital rights since those are yet to be allocated and might indeed be of value to a new player.

The Premier League probably looks jealously at the way the NFL can sell the same rights to multiple platforms. For example, Thursday night games next season will air on Fox TV, the NFL’s own NFL Network (which gets cross promotional branding on Fox), and Amazon who have renewed a previous deal. Now Amazon is reported to have spent perhaps $50m for the 2017 rights, so pocket change in the scheme of things, but it’s amazing that the NFL can sell the same games multiple times.

The NFL also repackages other games that it has “already sold.” While Sunday afternoon rights holders like CBS and Fox cover games in multiple territories, adhering to complicated rules about which fixtures have to be covered in which “local” market, nearly all the games are available to subscribers of DirecTV’s Sunday Ticket package. DirecTV obviously pays healthily for these rights – as do its subscribers.

Beyond that, NFL Network also offers Redzone (viewable in the UK on Sky Sports), which is ad-free coverage of all the afternoon’s fixtures, hopping from game to game as teams get closer to scoring. While the NFL owns NFL Network itself, it’s still effectively redirecting some viewers away from networks like CBS and Fox to its own network, where viewers are not exposed to those networks’ ads!

In some ways it’s remarkable that the NFL is able to do this, but American football is an in-demand product, and networks need it on their schedules. I’m sure that the Premier League would love to do something similar.

Facebook, Amazon and the Premier League

It’s nearly time for the money-go-round… sorry, merry-go-round, that is the Premier League rights auction for seasons 2019/20-2021/22. We’ve just started the second season of the current deal where Sky and BT between them have spent £5.1bn for the current round of rights. Recall that last time around, this represented a colossal 71% increase in revenues.

That money, allied with ever-increasing overseas TV rights, fuels the UK game. But there were questions about how much further rights could increase next time around. Sky and BT represent the only “broadcasters” who are likely to bid next time around, and assuming that each is broadly happy with its lot, you wouldn’t expect rights to increase substantially.

Indeed, it seems as though the current set of rights have caused some real pain to the broadcasters. Sky has broadly speaking cut back its sports coverage, losing men’s tennis, and reducing rugby union coverage. Anecdotally, it seems that more coverage is coming from Sky’s studios rather than sending production teams to events.

One way or another, Sky has tried to avoid massive increases to consumers, although prices are going up.

So if Sky and BT are fairly maxed out, how do Premier League clubs get some big increases next time around?

Today The Guardian reports that Manchester United vice-chairman Ed Woodward says that Amazon and Facebook will get into the game.

As far as everyone is concerned, these companies bring untold wealth. They could be game-changers – pardon the pun.

Well of course Woodward would say that. And I’m sure that Amazon, Facebook, Google and Apple will run the numbers. But at over £10m a match under the current contract, they’d need a compelling case. With the possible exception of The Crown, that blows all top TV dramas out of the water in terms of costs.

A lot has been made of Amazon taking on ATP Men’s Tennis in the UK from next year. They’re paying around £10m – the same price as a single Premier League match – for a year’s worth of tennis. Sky is said to have wanted to pay less than last time around, so it was to all intents and purposes giving up on the sport. They’d already dropped their US Open coverage.

For Amazon, tennis is a bit of a trial. Perhaps it’ll get them new Prime memberships, or make current members happier. But it’s not a massive cost. It’s not a multi-billion, multi-year commitment.

That’s not to say that one of GAFA won’t buy rights, but that’s a much bigger step. And what does that really get you?

All of this is before considering whether every football-loving household in the UK has enough internet bandwidth to support a live HD (or 4K) stream.

I could be wrong. But I’m not convinced just yet.