European leagues' TV revenue set to drop

LONDON • Revenues from football's domestic broadcast rights deals are expected to fall across Europe's top leagues this year due to a lack of competition between broadcasters, in a further blow to coronavirus-hit clubs who have spent almost a year without fans in stadiums.

Italy's Serie A could announce its deal for the 2021-2024 cycle later this week with revenue unlikely to meet the €1.15 billion (S$1.8 billion) a year target and could fall slightly short of the €973 million-a-year current deal.

With the Premier League, the French Ligue 1 and Spain's La Liga also due to negotiate deals for the next cycle this year, there is little optimism that domestic rights, which had grown strongly over the past two decades, will bring a much-needed cash boost.

Germany's Bundesliga concluded its deal last year, marking a slight fall.

"Everyone agrees that (revenue) will go down," says European television rights consultant Pierre Maes, author of a book on the sector.

The impact of Covid-19 has not had a significant impact on viewing figures but the flat market is seen as a result of the limited number of players fighting for the rights.

"In the past, we had fierce competition for rights and today, none of the top five markets has that competition. There was only one factor that led prices to where they are today and that was competition between operators. If you take away competition, the risk is there that prices will go down," said Maes.

"In all the big countries, we are now back to a monopoly situation or a duopoly situation in some markets."

Sky Sports shares the UK rights to the Premier League with BT Sport but there is unlikely to be a bidding war between the two companies when the competition undertakes its auction later this year.

"If you are in that position as a Sky or Canal Plus or whoever else, you don't need to bid high any more, you can afford to take a slight gamble and reduce the offer," Richard Broughton, research director at Ampere Analysis, said.

"It is not that the pay TV businesses are in trouble... but the wider markets' economics have just reduced the competitors in the market. Until that shakes itself out, we would expect a very flat market if not declines in rights fees."

The amount (S$1.56 billion) of revenue Serie A gets a year from its domestic broadcast rights. Experts predict that the Italian top flight's deal for the 2021-2024 cycle will be worth less.

The only challenge so far to dominant broadcasters is coming from online streaming services such as DAZN, which sources say submitted the highest bid in the auction in Italy. In most cases so far, streaming services have been the "supporting acts", with Amazon in the UK having the rights to 20 Premier League matches each season.

Despite DAZN's bid for Serie A domestic rights, which sources told Reuters was around €850 million per season to show all league matches, a higher offer than current main broadcaster Sky, few in the market see such battles with over-the-top (OTT) services becoming widespread across Europe or globally.

"I don't think OTT will substitute the traditional broadcasters, at least not in the short to medium term. I would rather think that OTT will supplement the current offering," said Amikam Kranz, vice-president media and sales for media rights agency Infront.

There are also indications that international sales may also have reached a peak. Qatar-based beIn Media Group, one of the biggest broadcasters of football, has not yet included itself in an auction for the rights it holds to show Serie A in 24 territories in the Middle East - its current global deal with the Italian league is worth US$500 million (S$662.6 million).

"The decline in domestic rights in the UK (in the last deal) was compensated for by a rise in international rights and definitely, that won't be the case any more," said Maes.

REUTERS