News analysis

EPL: Bidding frenzy cools - Losers for now appear to be EPL clubs

The outcome is a good one for Sky and BT, whose 2017 television channel-sharing deal took the heat out of bidding.
The outcome is a good one for Sky and BT, whose 2017 television channel-sharing deal took the heat out of bidding.PHOTO: REUTERS

LONDON • Sky and BT are imposing unfamiliar austerity on British football. Three years after they agreed to pay £5.135 billion (S$9.45 billion) for broadcast rights, the two companies bought the rights to air a similar number of games for £4.46 billion.

That suggests a self-destructive bidding war has ended, and will force the Premier League to look to new bidders and international rights to make up the difference.

The outcome is a good one for Sky and BT, whose 2017 television channel-sharing deal took the heat out of bidding.

The broadcaster will pay £199 million less per year and screen two extra games. It can spend the difference on shows such as TV dramas, in which digital rival Netflix invests heavily to win subscribers.

BT gets 10 fewer matches per year but has reduced annual payouts by 8 per cent, to £295 million.

Assuming it doesn't bid for the two leftover packages, that will help fund a push for full-fibre broadband.

The losers - for now - are the top 20 football clubs, which are the Premier League's shareholders and used soaring broadcast income to spend £1.4 billion on players last summer.

The losers - for now - are the top 20 football clubs, which are the Premier League's shareholders and used soaring broadcast income to spend £1.4 billion on players last summer.

Assuming the remaining games, many of which are scheduled in awkward mid-week slots, are sold at a 50 per cent discount to the ones that were snapped up, the total auction price per game would be £8.4 million, a fifth less than last time.

Had the per-game cost stayed constant, the aggregate difference would be £1.1 billion, or £55 million per club - roughly what Arsenal spent on Gabonese striker Pierre-Emerick Aubameyang.

Clubs will hope to bridge the gap with international rights deals.

Media consultancy Ampere reckons their value could hit £5 billion, compared with roughly £3 billion for the last round starting in 2016.

Interest from US technology groups such as Amazon could potentially push the figure higher. But short of an international saviour, English football could find itself out of pocket.

REUTERS

A version of this article appeared in the print edition of The Straits Times on February 15, 2018, with the headline 'Losers for now appear to be the EPL clubs'. Print Edition | Subscribe