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Broadcasting Revenue: The Golden Goose?

July 2, 2024

Broadcasting Revenue: The Golden Goose? - SBI Barcelona

Historically, broadcasting has been the primary driving source of revenues for the big five European leagues as well as their individual clubs. The situation is at an interesting junction currently. While Premier League’s appeal has seemingly increased with the expectation of an elevated international media rights value, at the same time French Ligue 1 has not been able to finalise a domestic media partner

This begs the question, has broadcasting revenue become the ‘golden goose’? In this series, we will evaluate the importance, growth and future of broadcasting as a revenue source

Across the European Leagues

The 700+ top division clubs across UEFA nations reported a total revenue of €23.9bn in 2022, of which 33% or €8.0bn was aggregated from the broadcast revenue stream. This is where it gets interesting

Of the total broadcast revenue, big five leagues cumulatively aggregated 88% or €7.04bn. This leads to a catch-22 kind of situation for the other leagues. Inability to command significant media deals makes them uncompetitive to big five which further makes them unable to get star players with attention-pulling power making them unviable to media spends

The share of broadcast revenue for three of the big five leagues, the Premier League, LALIGA and Serie A range between 44%-47%, whereas the share for Bundesliga is 32% and for Ligue 1 it’s 25%

Broadcasting Revenue: The Golden Goose? - SBI Barcelona

The Growth of Broadcast

The six year period from 2019/20 to 2024/25 saw English Premier League and Spanish LALIGA grow with the former growing to a greater value. Other three of the big five saw a periodic decline in media rights value. The chart shows the value growth over the same period of time

Broadcasting Revenue: The Golden Goose? - SBI Barcelona

English Premier League and Italian Serie A have completed the process of signing new domestic deals and the results seem cautious

  • When considered on a per season basis, the uplift from the current to the new deal in Premier League is only marginal, an increase in just over 3%
  • Also important to note, in case of Premier League, that more games will be shown live making the per game value lesser
  • The Serie A clubs will earn 3% less in new domestic deal than the previous one

This raises several discussion points

  • Have the top-flight football media rights value peaked already?
  • Is it a situational issue?
  • Will Serie A or leagues other than Premier League be able to get a higher value for international media rights?

The French Dilemma

The Professional Football League (LFP) is in a tricky position currently. It’s €505 million domestic deals with Amazon and Canal+ have expired and were in the market for a new media deal targeting €1bn (US$1.05 billion) in annual revenue for its domestic and international rights for the 2024-2029 cycle

Things did not work out as planned. Canal Plus, beIn Sport and DAZN were all in the reckoning frame, however, none of the major players submitted a bid. This has forced the LFP to conduct one on one negotiations. With weeks to go, if nothing works out, the LFP could launch its own channel to broadcast live matches from Ligue 1

Broadcasting Revenue: The Golden Goose? - SBI Barcelona

The launch of DTC service in the home market by LFP could be a game-changing moment for the industry. The LFP are reportedly targeting €543mn with 2mn subscribers in year 1 and their business plan targets an increase to over 3mn subscribers in the fifth year. However, there are several factors which have to be considered to make this work:

  • Involves significant expenses in production, technological infrastructure, marketing and customer service
  • Totally dependent on the number of subscribers and pricing
  • Have to factor in the CVC share (CVC invested €1.5bn for a 13% stake in LFP’s media rights business)

Only time will tell how this fares out

Conclusion

The meteoric rise of the football media rights making broadcast the most important revenue source followed by a series of stagnation, declining value, changing consumer preferences and rapidly evolving technological developments makes this period the most challenging ever and makes one ponder if broadcast has become the golden goose

The next few months will be very important and possibly be the defining moments of the European football industry  

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