The battle for the UK rights to the Premier League soccer league is heating up with the auction expected to kick off next week.
21st Century Fox-backed European pay platform Sky and telecoms company BT are facing fresh competition from a raft of digital firms such as Amazon, Facebook and Twitter. Deadline understands that there are over ten companies in the bidding process that have already held conversations with Premier League executives.
However, BT, one of the largest telecoms companies in the world, warned this morning that it would not overpay for the rights.
Marc Allera, Chief Executive of BT’s consumer brands, said: “With regards to the auction, that’s imminent, we know the value of the rights and we’ll be very disciplined going into that auction.”
These comments echo remarks made last year by Sky Chief Executive Jeremy Darroch. “The Premier League has remained fantastic, it’s important but it’s critically only one part of the mix. That’s also true in some other sports, there are one or two other things you’ve seen us walk away from because we can just see a better way to deploy the capital,” he said.
The auction, which is thought to start on February 8, will consist of seven packages of games, featuring the likes of Manchester City, Manchester United, Liverpool and Chelsea, which will run for three years from the start of the 2019 season. However, one company will not be allowed to buy more than five of the packages.
BT previously took advantage of this aspect of the auction to score two packages from Sky. Paolo Pescatore, Vice President of Multiplay and Media at analyst CCS Insight, said this was a “pivotal moment” for the firm. “At the previous auction, BT Sport paid more for matches shown on Saturday nights, effectively swapping the lunch-time game with Sky, and this led to a rise in viewers,” he said.
Amazon is the most likely competitor for packages that Sky does not win. Last year, Jeff Bezos’ firm outbid Sky for the UK rights to the ATP World Tour tennis tournament
Neil Wilson, senior market analyst at brokerage ETX Capital said: “Amazon has just entered the UK market by outbidding Sky for ATP tour tennis rights, which is a sign of things to come. It took a £1.2B bid from BT, £300 million more than in 2013, to see off Sky for the Champions League rights. We’ve seen what happens when Amazon appears on the scene.”
Investment bank Berenberg agrees that Amazon is a credible bidder. “While Netflix has ruled itself out of the bidding, and has shown no sign of interest in sports rights in other markets, this is not the case for Amazon. Meanwhile, Facebook and Twitter have also been flirting with premium sports broadcasting, although we view these two parties as unlikely to be meaningful players in the auction, at least not this time,” it noted.
However, not all analysts are confident that the digital platforms will play ball. Some sources have suggested that talk of the FAANGs (Facebook, Amazon, Apple, Netflix, Google) moving into sports rights into a major way may have been exaggerated to push up the price of the bids.
In 2015, Sky and BT paid £5.1B for the rights, a 70% increase on the previous deal. The sports world is now waiting to see whether this also increases in this year’s auction.
“Cost inflation has remained high in sports rights, given that these remain key drivers of pay-TV subscription growth and loyalty. UEFA Champions League rights were renewed at 32% more than the previous deal, the value of English cricket UK TV rights nearly trebled and the Football League rights are understood to have almost doubled on a per season basis. This is without any apparent intervention from new players like the US online giants, and suggests that cost inflation could remain substantial for the Premier League rights as well. We currently assume 35% cost inflation for Sky and 18% for BT, assuming like-for-like renewal, ie. five and two packages, respectively,” added Berenberg.