BT and Sky Seize Premier League Rights

Companies Splash out £4.46 Billion to Broadcast Games

On Tuesday, the Premier League announced the initial winners of domestic TV rights to broadcast games in next three football seasons. It revealed the auction results for only five of the seven packages on offer.

For now, BT and Sky will pay a combined amount of £4.46 billion for broadcast rights over the next three seasons. Sky secured 128 games per season for £3.58 billion and BT will show 32 matches per season at a cost of £885 million.

In this auction, 42 more games were on offer, taking the total to 200 of the total 380 matches played in each season. They include eight matches on Saturday evenings.

Sky seems to be the big winner from the announcement. It will have slightly more games than it does currently, gets all first-pick weekend games, and regains the Saturday 5:30 PM slot as well as a new 7:45 PM slot. This line-up strongly complements its dominance of matches on Sundays and Monday nights. The company will also pay less per game, down from the current £11 million to £9.3 million in the new deal.

For now, BT will have fewer games, but will pay more per match, up from the current £7.6 million to £9.2 million. Sky’s reclaiming of the Saturday evening 5.30 PM games that it lost to BT in 2015 will be a big blow to its rival. BT Sport revealed that audience numbers rose when it switched from Saturday lunchtime games to the 5.30 PM slot.

In 2015, Sky and BT paid a combined £5.18 billion for three years of domestic TV rights. This was a huge 71 percent rise on bids in 2012, which also involved Sky and BT. The lack of increase in bids suggests that broadcasters believe there’s a ceiling on what viewers are willing to pay to watch Premier League games.

Even though more games were available in the current auction, the Premier League is sure to be disappointed that it hasn’t made the most from its prized asset, and that the total amount per game has fallen. Depending on the outcome of the remaining packages, this could be the first time that the total price paid has fallen since the auction in 2003. However, we expect the Premier League to recoup any loss in revenue through the upcoming sale of overseas broadcast rights.

In the run-up to this auction, all the focus was on BT and any new bidders. Amazon looked to be a contender, having already won the rights to ATP tennis in the UK from 2019 (see Web Giants Eye Rights to Football Matches). In the end, it seems the cost of Premier League TV rights simply proved too steep for the Web brands. But there are several other costs, such as production, and moves into this area would involve a fundamental shift in their content investment strategy and pricing models.

Attention now turns to the remaining F and G packages of rights. According to the Premier League, there’s interest from multiple providers for these packages. Announcing the winners of the first five packages was arguably a smart move by the Premier League. It effectively squeezes BT to bid more than it probably needs or wants to for one of the unsold packages.

The auction rules state that no buyer can be awarded more than 148 of the 200 games available, which bars Sky from gaining both of the remaining packages. We firmly believe that BT must win at least one of them and if possible both. Although we can’t rule out a bid from Amazon, we consider it unlikely.

Premier League auction packages, 2018

Auction Package	Games	Time Slot	Winner
Package A	32	Saturday 12:30 PM	BT
Package B	32	Saturday 5:30 PM	Sky
Package C	32	Saturday 7:45 PM (8 games); Sunday 2 PM (24 games)	Sky
Package D	32	Sunday 4 PM	Sky
Package E	32	Sunday 2 PM (8 games); Monday or Friday 8 PM (24 games)	Sky
Package F	20	Bank holiday and midweek games	–
Package G	20	Midweek games	–

Our full analysis of the announcement is available to clients of our Multiplay Strategies service suite here. For more information about this service, please contact us.