Mind-Blowing Announcement: Premier League TV Rights Auction in UK Set to Make History!

Premier League officials are polling broadcasters ahead of an upcoming auction for the rights to show top-flight football matches on TV, in what will be a major test for media spending as their own customers face a cost-of-living crisis.

2019-22 Premier League Rights contracts with Sky, BT and Amazon – worth around £5bn – were extended to 2025 during the pandemic, meaning this will be the first competitive national auction since 2018.

However, analysts warn that there is a risk of a drop in values ​​due to pressure on broadcasters. According to Enders analysts, the total value of European football media rights is already stagnant.

“If post-Covid inflation is taken into account, we estimate that the value would fall 17% from 2018-19 by 2023-24 in real terms,” they said, pointing to the competitiveness of the broadcast market “where all indications point downwards consistent with the tepid consumer market”.

The retreat of telecom operators who use football as an attraction for broadband packages in recent years has calmed European auctions, media executives say. Meanwhile, broadcasters in the pay-TV market are under pressure as consumers rethink ever more expensive subscriptionsalong with a downturn in the advertising market.

“Obviously in a cost-of-living crisis. . . the price of everything is worrying,” admitted Premier League chief executive Richard Masters earlier this month. “It is up to our television partners to set the price of those subscriptions. We think of all of these things in the round when planning our auction.

Richard Broughton, executive director of consultancy firm Ampere Analysis, said he did not expect any of the potential bidders “to be particularly aggressive”.

“I don’t think there’s much incentive for someone to go all out, especially given their focus on cost-control measures,” he added.

A Premier League club executive also raised questions about where there would be a big rise in values. “If we got a 5% lead I would be happy because the rights market is slowing down,” the person said.

Premier League officials and broadcasters are eyeing the troubled auction of rights to broadcast Serie A in Italy, which has yet to be decided despite successive rounds of bidding from broadcasters.

The ‘product’ the Premier League wants to sell is more valuable, according to broadcast executives, with strong national and global interest in top-flight English football.

Sky said the 2022-23 season was the most watched in history and this season saw a record start with over 8 million viewers during its opening weekend. Those of the Premier League growing global popularity it means that, unlike all other European football competitions, it already makes more money from international broadcasts than from the domestic market.

However, many households – in the UK and elsewhere – are looking to reduce the amount of money they spend on TV subscriptions, which is likely to weigh on offers.

Sky is one of the few guaranteed bidders given the importance sports rights have become for its brand. Losing a significant number of Premier League games is almost unthinkable, according to analysts.

“Sky could pay a premium just to keep everyone else out. They need these rights,” the Premier League club executive said.

But Sky’s revenue fell 11.5% to $17.9 billion last year, and the company did started cutting jobs in a slowing advertising market. Sky’s parent company, Comcast, has already written down the value of the business by $8.1 billion from $18.1 billion, in part due to “reduced estimated future cash flows as a result of macroeconomic conditions in the territories of Sky”.

BT was its main rival in the latest auction, but the dynamics changed after it merged its sports businesses with those owned by Warner Bros Discovery (WBD) this year to create TNT Sports. BT is also now on a cost-cutting campaign, with plans to cut up to 42% of its workforce by the end of the decade.

WBD, which is expected to eventually take over the TNT Sports business, is also facing challenges in a streaming market where investors are demanding profits rather than higher spending on expensive content.

With Norwegian streaming service Viaplay under pressure after struggling to make it through a crowded market, DAZN, the loss-making sports streaming service backed by billionaire Leonard Blavatnik, will also be looking to add top-flight English matches. Adding premium sports to the UK is seen as important by executives for the London-based group, but people close to DAZN say it is unlikely to want to spend significant sums.

The wildcards will be big tech companies like Amazon, which acquired a small package of rights in the last auction. Analysts believe the US e-commerce giant is likely to participate, but will focus on gaming security around key retail dates, as before. Apple, which bought the US sports rights to perform globally, is seen as less interested in a set of expensive rights for a single country.

A DAZN spokesperson said: “The UK market is clearly of interest, but only if we can deliver the value and innovation that fans want and the market needs.”

TNT wants to keep the premium sports rights, according to a person close to the company. When it was still wholly owned by BT, it had already renewed its rights to the Champions League and more Uefa competitions until 2027. Sky declined to comment.

Premier League officials are now looking into how to structure the auction – which could take place later this year – to encourage more interest in the bids.

Mark Oliver, of Oliver & Ohlbaum Associates, said the league’s strategy is to “build tension” and divide rights into packages that incentivize broadcasters to compete against each other.

But even so, he saw that the price is likely to be stable or slightly declining. “They might get lucky if they split it all right and got a 5-10% increase. Sky has learned to live with less Premier League, without Champions League. TNT probably isn’t looking to increase its supply. Amazon has been an incremental opportunist elsewhere and DAZN is the only unknown”.

Broadcast executives say the most likely outcome is that the Premier League will try to increase overall value by allowing more matches to be broadcast, to achieve a higher absolute price but potentially mask a decline in the value of the price per match. Last year, UEFA managed to raise its core revenue from rights auctions, in part by increasing the number of matches on offer.

This was also the strategy pursued by the English Football League (EFL), which managed to raise the price of rights by 50%, but only by quadrupling the number of matches to over 1,000 matches per season. Sky retained exclusive rights for five seasons to 2028-29 for £895m in fees and £40m in “marketing perks”.

Broadcasters are banned from showing matches at 3pm on Saturdays, so more Premier League matches will be moved to Fridays, Sundays and Mondays. One option will be to auction multiple, or even all, games not scheduled for 3pm for the first time.

One said the league could increase the number of games from its current 200 to 250-270, which could be split into packages large enough for bidders to build their own season ticket services.

“Bidders must have the ability to get at least one properly sized package with top matches each week,” said another.

“They will look to add more advertising space to monetize the league,” another TV executive said, adding that the Premier League could also review the three-year rights life.

Masters told reporters ahead of the new season: “I know people are frustrated that they can’t watch every game. We have progressively added more games to our live rights packages. We are at 200 now. And of course we’re looking at our packaging strategy: the volume of lots that will go into the auction. All of these things are under study.”