European Football Media Rights: Will the Big Bucks Continue?
Four of the ‘big five’ European leagues have already begun their quest to find the next broadcast partners for their upcoming cycle. Recently English Premier League & Italian Serie A awarded their domestic media rights. Given the tough economic conditions at present, we will try to evaluate the deals and what can be expected from the other leagues
First, the current status
Premier League is heads & shoulders above the rest of the ‘big 5’ leagues in terms of rights value. With €3.94b per season in value (domestic and international rights combined), Premier League is 48% more than the next, LALIGA. Adding a defined payment distribution formula between teams, it can make the boast of a financially superior league
Here’s a look at the current cycle
European Football Media Rights Value: Uneven Gaps
The situation is quite precarious now. French Ligue 1 & Italian Serie A rights cycle gets over at the end of current 2023/24 season and they are in a big hurry to secure new broadcast partners. English Premier League and German Bundesliga existing rights continue till the end of 2024/25 season but nevertheless, they would look to cement the rights partners at the earliest. Let’s look at individual leagues
French Ligue 1: Locked in Impasse
What began as an ambitious plan targeting €1b in media revenues through a combined domestic and international media rights has unfortunately come to an abrupt halt. The initial plan to hold auctions initiating a bidding war between the likes of BeIN Sports/DAZN with the hope of Amazon Prime joining in along with Canal+ did not materialize. Only DAZN and BeIN have submitted qualitative offers for its rights but did not meet LFP’s (French Professional League) expectations. Canal+ had previously declared no interest in getting involved in the bidding process
This impasse led to the scrapping of the auction.
The failure to attract quality bidding war is a disappointment but with DAZN / BeIN Sports already submitting a bid, it is expected that a fresh round of negotiations will continue post holidays and come to a positive conclusion
Italian Serie A: Almost There
Italian top league #SerieA awarded the new domestic media rights to existing sports media company #DAZN & pay-TV broadcaster #Sky after 17 of the 20 league teams gave approval of the deal
The league had set a revenue target of €1.44b per year for an increased 5 year deal, which did not materialize
Serie A Domestic Media Rights Deal: Not Quite on Expected Lines
As per reports, clubs will earn less than €900m annual for year 1 & year 2, with the amount increasing from year three to five. Not an expected turn of events and possibly a reminder of reality for the Italian league but nevertheless, they will probably be satisfied to clinch a deal and now the focus firmly set on securing strong international deals
German Bundesliga: Waiting for the Action
The situation is slightly different for German Bundesliga 1 & 2. German Football League has been trying to seek private equity investments in Bundesliga for quite some time which has finally received a boost with 24 of the 36 clubs backing the plan. The plan is to sell eight per cent share of its TV and marketing rights in a 20-year agreement to PE investors by creating a new marketing company
- The process started as early as May 2021 when discussions started which got halted
- Talks resumed in Jan 2023 but the proposal was rejected in May 23 when they failed to get 2/3rd majority from clubs
- Another approach has started from Nov 23 reportedly for stake sale between 6%-9% for as much as €1bn
- A vote held in December 2023 between Bundesliga clubs have finally voted for the auction to be staged
Vote to Secure Private Equity Investment
The negotiations for investment in scheduled to be held in the first quarter of 2024 and a decision is expected to be reached by March. This could help bolster a significant value increase the upcoming media rights cycle. German Football League is in no hurry to begin with the media rights negotiation. They can well settle with the PE investment first and then get the media rights negotiation to begin
English Premier League: Increasing Value?
The next cycle of Premier League domestic media rights was confirmed recently. The highlights:
- Rights value: £6.7b for 5 years; making it £1.675b per year that’s a 4% up over the existing deal
- Broadcasters remain Sky + TNT; No Amazon or any streaming
- Sky bags 4 out of the 5 packages which means a minimum of 215 games shown live, that’s about a 100 more than current. This reduces the per game value
English Premier League: Domestic Media Rights Rules!
Given the current situation where Serie A rights value has reduced and Ligue1 yet to finalise broadcast partner(s), this deal seems to be a good one. On the other side, the reduction of per game value might have an effect in the next cycle but that is 5 years down the line. Now all eyes are set on the international rights
European football is in a state of war with the rising tough economic situations. Rising costs leading to increased cord-cutting numbers which in turn leads to a difficult media value generation. In such a flux-like situation, it remains to be seen which league ends up on a stronger note
SBI offers a professional Master in Football Business & Management which will start in October 2024. The program is designed to provide you a comprehensive understanding on the business of football, taught by top industry professionals. One of the core subjects taught is sports media rights across various markets in the football business ecosystem.
See program details here: Master in Football Business & Management