Premier League prepares to kick off UK television rights auction

Premier League officials are sounding out broadcasters ahead of a forthcoming auction for the rights to show top-flight football games on TV, in what will be an important test of media spending as their own customers endure a cost of living crisis.

The 2019-22 Premier League rights contracts with Sky, BT and Amazon — worth around £5bn — were rolled over to 2025 during the pandemic, meaning this will be the first competitive domestic auction since 2018.

However, analysts have warned there is a risk of a drop in values thanks to the pressure on broadcasters. The total value of European football media rights has already stagnated, according to analysts at Enders.

“If post-Covid inflation was factored in, we estimate that the value would be down 17 per cent on 2018-19 by 2023-24 in real terms,” they said, pointing to the competitiveness of the broadcasting market “where all indications point downwards consistent with the tepid consumer market”.

The retreat of telecoms operators using football as a draw for broadband packages in recent years has taken the heat out of European auctions, media executives say. Meanwhile, broadcasters in the pay-TV market are under pressure as consumers rethink increasingly expensive subscriptions, alongside a downturn in the advertising market.

“Obviously in a cost of living crisis . . . the price of everything is a concern,” admitted Richard Masters, chief executive of the Premier League, earlier this month. “That is down to our broadcast partners to set the price of those subscriptions. All of these things we think about in the round when we are planning for our auction.”

Richard Broughton, executive director at consultancy Ampere Analysis, said he does not envisage any of the potential bidders “being particularly aggressive”.

“I don’t think there’s much incentive for anyone to go all out, particularly given their focus on cost-control measures,” he added.

One Premier League club executive also raised doubts over where there would be a big uplift in values. “If we came 5 per cent ahead I’d be delighted because it’s a slowing rights market,” the person said.

Premier League officials and broadcasters are watching the troubled auction of rights to show Serie A in Italy, which has still not been decided despite successive rounds of broadcaster bids. 

The “product” that the Premier League wants to sell is more valuable, according to broadcast executives, with strong domestic and global interest in English top-flight football.

Sky has said that the 2022-23 season was the most watched in history, and this season saw a record start with more than 8mn tuning in across the opening weekend. The Premier League’s increasing global popularity means that — unlike all other European football competitions — it already makes more money from international broadcasts than from its home market. 

However, many households — in the UK and elsewhere — are seeking to reduce the amount of money spent on TV subscriptions, which is likely to weigh on bidding.

Sky is the one of the few guaranteed bidders given how important sports rights have become to its brand. Losing a significant number of Premier League games is all but unthinkable, according to analysts.

“Sky might pay a premium just to keep everyone else out. They need those rights,” said the Premier League club executive.

But Sky’s revenue decreased 11.5 per cent to $17.9bn last year and the company has begun to cut jobs amid a slowing advertising market. Sky’s parent Comcast has already written down the value of the business by $8.1bn from $18.1bn in part owing to “reduced estimated future cash flows as a result of macroeconomic conditions in Sky’s territories”.

BT was its main rival in the last auction, but the dynamics have changed after it merged its sport operations with those owned by Warner Bros Discovery (WBD) to create TNT Sports this year. BT is also now on a cost-cutting drive, with plans to cut up to 42 per cent of its workforce by the end of the decade.

WBD, which is expected to eventually take control of the TNT Sports business, is also facing challenges in a streaming market where investors are demanding profits rather than more spending on expensive content. 

With Norway’s streaming service Viaplay under pressure after struggling to break through in a crowded market, DAZN, the lossmaking sports streaming service backed by billionaire Leonard Blavatnik, will also look to add top-flight English matches. Adding premium sports in the UK is seen by executives as important to the London-based group, but people close to DAZN say it is unlikely to want to spend significant sums.

The wild cards will be the large tech companies such as Amazon, which in the last auction acquired a small package of rights. Analysts see the US ecommerce giant as likely to participate, but to focus on securing games around important retail dates, as previously. Apple, which has been buying sports rights in the US to show globally, is seen as less likely to be interested in an expensive set of rights for a single country.

A DAZN spokesman said: “The UK market is of clear interest, but only if we can deliver the value and innovation that supporters want and the market needs.”

TNT is keen to retain premium sports rights, according to a person close to the company. When still wholly owned by BT, it had already renewed its rights to the Champions League and other Uefa competitions until 2027. Sky declined to comment.

Premier League officials are now looking at how to structure the auction — which could take place before the end of the year — to encourage greater bidding interest.

Mark Oliver, of Oliver & Ohlbaum Associates, said the league’s strategy needed to “create tension” — and divide the rights into packages that incentivise broadcasters to compete against each other.

But even so, he saw the price likely to be flat or slightly down. “They could get lucky if they parcel it up in the right way and get an increment of 5-10 per cent. Sky has learnt how to live with less of the Premier League, without the Champions League. TNT are probably not looking to up their bid. Amazon have elsewhere been incremental opportunists, and DAZN is the one unknown.”

Broadcast executives say that the most likely outcome is that the Premier League will try to push up the overall value by allowing more games to be broadcast, to gain a higher absolute price but potentially mask a fall in value of the price per game. Uefa was able to raise headline revenue from its rights auctions last year in part by increasing the number of games on offer.

This was also the strategy pursued by the English Football League (EFL), which managed to increase the price of the rights by 50 per cent but only by increasing the number of fixtures fourfold to over 1,000 matches per season. Sky retained the exclusive rights for the five seasons until 2028-29 for £895mn in fees and £40mn in “marketing benefits”.

Broadcasters are barred from airing games at 3pm on a Saturday, so more Premier Leagues games are being shifted to Friday, Sunday and Monday. One option will be for more — or even every — non-3pm game to be put into the auction for the first time. 

One said that the league could raise the number of matches from 200 at present to between 250-270, which could be divided into packages of sufficient scale to allow bidders to build their subscription services.

“Bidders need to see the chance to get at least one decent sized package with top matches every week,” another said.

“They will look at adding more inventory to monetise the league,” said another broadcast executive, who added that the Premier League could also review the three-year term of the rights.

Masters told reporters ahead of the new season: “I know people are frustrated that they can’t watch every game. We have progressively put more matches into our live rights packages. We’re at 200 now. And obviously we’re considering our packaging strategy — the volume of matches going into it for the auction. All those things are under consideration.”