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Football TV Rights- The European Media Landscape. EPL Analysis
The value of the best European football leagues has skyrocketed as fans worldwide increasingly follow their favourite football clubs, players and competitions.
The commercialization of TV rights represents the highest value of the profit and loss account for the top European football clubs and leagues. Through a complex tender process, broadcasters compete to acquire the rights to broadcast the European football league games and become the official rights-holder of the competition. In this framework, the race to acquire the TV rights of the best European football leagues has become the epic battle for the most important broadcasters.
The English Premier League has always been way ahead in terms of TV rights value in comparison with other leagues. With a centralized distribution model, the EPL has been known to allocate the money coming from the TV rights in a fair way among all clubs with the aim of creating balance in the competition and avoiding a huge financial disparity.
Premier League Broadcasting Rights since 1992
When the Premier League was formed in 1992 a set of new rules and changes emerged in the media rights landscape. As previously mentioned, a new profit-driven mentality was put in place as the cornerstone of the new club organization.
1992 marked the starting point for a new era of media rights as the Premier League impososed new rules as the influence of the league grew in the international and domestic media market. The launch of the Premier League on Sky Sports is what moved the goalposts. One of the main technological improvements was the introduction of subscription-based broadcasting that used encryption of the satellite signal as a turnstile to allow viewers acces. Other several aspects related to the coverage of the games stood out such as the increased in number of cameras installed around the pitch to cover the action from a wide array of TV angles.
Rights Ownership and the Premier League’s Role
Football clubs own their rights however they give the Premier League a mandate to license these rights centrally to potential buyers. The rights ownership and licensing is governed by the Premier League's constitution and any change must be approved by two-thirds of the clubs. Some of these rights can be utilised directly by the clubs. Under the club license agreement it is defined which rights may be used, however, clubs are not allowed to sell these rights to third parties.
Breakdown of Broadcasting Rights in the EPL from 1992 to 2019
In the figure above we can see the breakdown of the revenue coming from the commercialization of the rights over the years. The number of games each year is also included as well as the main broadcasters which acquired the official rights. The number of games per season has been increasing on a consistent basis and currently the competition stands at 168 games (from 2016-2019).
There is currently a duopoly in the domestic market marked by the two broadcasters in the last two cycles (2013-2016 to 2016-2019), Sky and BT. They have split the rights between each other.
Overseas Rights and UK Highlights EPL
Domestic vs Overseas EPL Broadcasting Rights Overview
In the next charts we have provided an overview of the domestic rights as well the overseas rights separately and then together to see the variation over the years.
1. Domestic Rights:
Note: In the 2019-2022 cycle one of the two remaining packages that BT has recently bought for £975 million is included. Amazon purchased the other one but the figures are not disclosed. In the figure above it is clear how the EPL domestic TV rights value has dropped in the new 2019-2022 cycle reaching £4.554 million, a 11% decrease in comparision to the previos one.
2. Overseas EPL Rights
3. Domestic & Overseas Rights
In the figure above, a comparison of the revenue between both domestic and overseas rights was made. As it is clearly shown, the greatest revenue comes froem the sale of domestic rights with Sky and BT as the main broadcasters are willing to pay huge amounts to acquire them. That said, the revenue generated from the overseas rights as continued to rise significantly in recent years.
The chart above paints an interesting picture from a digital disruption and consumption perspective as we see that over 40% of the UK sports TV audiences are over 55 years old.
EPL Packages 2016-2019
There are seven packages split from A to G. There are five rounds of match picks indicating which broadcaster has the right to choose preferred matches and when.
Both Sky and BT own the PL rights. They have shared the rights since 2013 being Sky the dominant broadcaster with most of the packages. See below a graphic with the amount of money paid by the different broadcasters over the years
Main Broadcasters in the UK and their Investment in EPL TV Rights
The cost of the TV rights from 1992 to 2019
During the first four cycles from 1992 to 2007 Sky Sport was the only dominant broadcaster. As of 2007 new competitors entered the race for the EPL rights. During the cycles of 2017-10 and 2010-13 EPL TV rights were split into Sky and Irish-based broadcaster Setanta. In both cycles Sky remained as the dominant broadcaster.
It is clear how much the EPL TV rights value has grown over the last cycles. The value of EPL TV rights reached an incredible figure of 5 billion in the 2016-19 cycle which represented a 70% growth compared to the previous cycle. The value in the new 2019-2022 cycle has dropped by 11 % reaching a total value of 4,55 billion.
EPL PACKAGES 2019-2022
Number of Live Games Acquired for Broadcasters from 1992 to 2022
Sky Sport is the broadcaster that has acquired the most games in all cycles going from 300 games in the cycle 1992-1997 to 378 live games in the 2016-2019 cycle.
BT has become the main competitor to Sky as they have acquired 114 live games in the 2013-16, reaching 126 live games in the 2016-19 cycle.
It is remarkable to see the increase in the number of games as the competition has evolved. In the 2016-19 cycle there will be a total of 504 games, in comparison to the 300 live games available during the 1992-97 period. In the deal reached for 2019-2022 cycle Sky remains the dominant broadcaster with 384 live games followed by BT and Amazon with 156 and 60 and respectively.
Cost of Premier League Broadcasting Rights (£m per game/season/TV broadcaster 2010-2022)
The chart above represents the cost (in £ million) of Premier League live games per season and per broadcaster from 2010 to 2022. For example, in the 2010-13 cycle, Sky paid a total of £541m/season and Setanta paid £53m/season reaching a total of £594 million/season. Furthermore, the average cost per game is also shown per season and per broadcaster.
Premier League TV Rights Deal Money Distribution
Distribution Model of TV Rights in the Premier League
• 50% of UK broadcast revenue is split equally between the 20 clubs
• 25% of UK broadcast revenue is paid in "Merit Payments" ("Prize Money" per place in the table)
• 25% of UK broadcast revenue is paid in "Facility Fees" each time a club's matches are broadcast in the UK
• All international broadcast revenue and central commercial revenue is split equally among the 20 clubs.
1) The EPL is a powerful brand/product which has made the most out of its reputation over decades since 1992, when EPL was formed. The value of the EPL TV rights has been drastically increasing in the previous cycle until 2016-2019 period. An epic battle between broadcasters has been carried out in the last years to acquire the rights.
2) The hyperinflation of the TV rights has led to broadcasters no longer being willing to keep paying huge amounts of money to become the rights-holders of the world’s most watched football league. What it is more surprising is that the value of the rights in the 2019-2022 has dropped. It is a new era where many questions have arisen with the new deal.
3) It is evident tha there is a new media landscape in front of us that is transforming the established business models of the industry. Tech giants such as Amazon have entered the EPL media market and are willing to compete in this space. New ways of sport content consumption have arrived and the traditional broadcasters will have to rethink their strategies in the near future when it comes to offering attractive sport content.
This article was written by Carlos Gazapo, Marketing Assistant at the Sports Business Institute Barcelona.
Start Date: October 2019 | Duration : 8 Months
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