The Premier League: what can we expect from its UK TV rights sale?

With contenders preparing to enter their sealed bids on Friday, SportsPro editor Eoin Connolly sets the scene ahead of the Premier League's latest round of domestic broadcast rights sales.

The Premier League: what can we expect from its UK TV rights sale?

English soccer’s Premier League is expected to announce the results of its latest round of domestic broadcast rights sales at any time, as contenders return their sealed bids on Friday. After stunning results in the past two cycles, more modest gains are expected at home this time - unless one of the tech giants makes a massive statement. 

What’s on offer?

The UK is a rich sports market, in more ways than one, but soccer is all but an industry apart. Nothing attracts anything like the same level of interest domestically as the Premier League and it is indisputably the only seasonal sports competition the country has to offer that has a truly global fanbase. It is the number one British sports broadcasting prize by a considerable distance but that, naturally, limits the number of potential buyers.

A record 200 of the league’s annual 380 matches will be available for broadcast, with Saturday night games and a selection of full midweek rounds on offer for the first time in a collection of eight rights packages. The Saturday 3pm blackout that has existed in the UK for decades - the result of a gentleman’s agreement designed to protect matchday attendances – is still intact, but fewer top-flight fixtures than ever will be scheduled for that kick-off time.

The three-year contracts on offer remain platform-agnostic, with mobile digital rights rolled in. The publicly funded, free-to-air BBC has already snapped up the domestic highlights rights, paying UK£211.5 million to show coverage on its celebrated Match of the Day programme, as well as digitally and across a range of other magazine shows. That deal is worth just UK£7.5 million more than the current deal. The previous rise, for what was the first deal to allow the network to show Match of the Day on demand, was UK£24.3 million.

What happened last time?

UK£5.136 billion is the figure to beat. There was audible astonishment when Premier League executive chairman Richard Scudamore, admitting his own surprise, announced the prices attached to the current rights deal back in 2015, having wrung a 70 per cent uplift out of the then raging enmity between long-term partner Sky Sports and newcomer BT Sport.

The conditions that had led to that result were unique. UK telecoms giant BT had stunned the industry when it first entered the sports broadcast rights picture back in 2012, with the scale of its ambition and its financial resources far beyond what anyone had expected as it muscled into the Premier League arena.

Set within the context of a domestic ‘triple-play’ contest between BT and Sky Sports owner BSkyB – which saw each using premium entertainment content as a means of installing broadband and then mobile user bases – the expectation had been that the latter’s long-undisputed pre-eminence was under threat.

That perception was only reinforced by a string of big acquisitions by BT Sport, not least a stunning UK£900 million deal for Uefa Champions League and Europa League rights - since renewed. Sky Sports had waved off the loss of those rights but the Premier League had been a cornerstone of its identity and the most popular driver of subscriber uptake since it became the founding broadcast partner of the competition in 1992.

It has been forgotten now, but there were a couple of other spectres looming over the process. Qatari-owned BeIN Sports had yet to make a free-spending entry into the UK, but some still suspected it might. Eurosport was now backed with Discovery’s dollars and three months away from its landmark €1.3 billion deal for six years of pan-continental Olympic coverage; its intentions were hard to read.

So Sky Sports went big. It committed a total of UK£4.18 billion over three years for five of seven available packages, including marquee games and the majority of first picks, in a bid that worked out to UK£10.19 million per game. BT Sport, to the surprise of many, kept its powder relatively dry, upping its spend over the three years by UK£200 million to UK£960 million for a different pair of minor packages than it already held.

Who’s in the running now?

Incumbents BT Sport and Sky Sports are widely expected to bid strongly again, although the dynamics have shifted considerably. Between its significant outlay on rights and production costs, the split of BT from its Openreach telecoms installation arm, and financial challenges for the wider group, BT Sport has realigned its ambitions from capturing the UK sports TV market to consolidating in second place.

Speaking to investors last week after BT’s share price hit a five-year low, chief executive Gavin Patterson said the group had a “Plan B” in place in case it lost Premier League rights.

“I don’t want in any way to diminish the importance of the Premier League of course, and the Premier League’s importance to us,” he said. “But it is one of a broad set of rights. We will be competitive but ultimately won’t go beyond the price it is worth to us.”

BT Sport lost out to Sky Sports last summer in a landmark tender for English cricket rights - a blow ahead of the channel’s coverage of Ashes matches from Australia - and tensions between the two parent companies have eased considerably in the past year. In December, BT and Sky announced a new content-sharing partnership, giving viewers on the Sky platform access to BT Sport channels and BT users access not just to Sky Sports but to heavyweight entertainment offerings like Sky Atlantic.

That, in short, means there is less incentive for the two networks to take viewers off one another. While both are still likely to be competitive, each will be straining to keep their spend as close to current levels as possible - and each could be more confident than in recent cycles of doing so.

Given the levels of investment involved, it is unlikely that any other traditional runners will enter the race - Eurosport has bought domestic soccer rights for a range of leagues, including German soccer’s Bundesliga, but the Premier League may be a step too far. With that in mind, Scudamore and his team will have looked outside the mainstream sector, and to Silicon Valley, for a stalking horse.

Facebook is expected to hire Eurosport chief executive Peter Hutton as its global head of live sport in the coming months. It has a dense network of partnerships in sport and a new Watch video platform which needs content. Its model is very much geared around free-to-view content, which might preclude a bid at the very highest level if it proved too difficult to recover the costs. But it has money to spend - its revenues were US$26.885 billion in the 2016 financial year - and a failed US$600 million bid for Indian Premier League (IPL) cricket rights last year suggests it is willing to spend it for the right product.

Still, with Netflix currently uninterested in building a live content platform, it is Amazon which is being most closely linked with a significant move this time. The ecommerce giant-turned-streaming contender has dipped its toe in the water in the UK and elsewhere through its partnerships in men’s tennis and beach volleyball, while it has also been in talks for premium rights in other territories - including the Uefa Champions League. Its near-total lack of production infrastructure, and the steep likely cost of creating that, might stay its hand for now from a bid at the higher end of the scale but there are few companies with such wherewithal to make the implausible possible.

Some remain sceptical, however. In October, Enders Analysis founder Claire Enders said UK Premier League rights would prove “expensive for an experiment” and suggested the talk of a major tech entry - encouraged by figures such as Manchester United executive vice chairman Ed Woodward - was designed to “sow confusion and fear” and the sense that the “product has magical and mystical properties, which it does not”.

What might happen?

The Premier League rights sale process is famously secretive and the reality is that no one will have a clear view of what the outcome will be until the bid envelopes are unsealed in the organisation’s London offices. That said, very few observers expect the same spectacular growth in income that resulted from the last two cycles - at least not from domestic TV partners.

Ampere Analysis has projected the UK deals to come in at a combined value of between UK£5.3 billion and UK£5.9 billion from 2019 to 2021, but for overall income to rise as high as UK£10.9 billion once the international deals are signed. Back in August, an analyst for Citi told The Guardian that the presence of Amazon and others in the domestic race could stimulate around a 45 per cent rise.

Much will depend on how serious the tech players are, and if they are interested in anything beyond the new eighth package, but the determination of Sky Sports and BT Sport to hang on to existing coverage will also be a crucial factor. It is entirely possible that each could prioritise some of their existing packages and pay roughly the same for less soccer, rather than more for a similar number of games.

Either way, the Premier League will soon know how much pressure it is under to deliver a boost overseas once the UK rights sales are complete.

Woodward noted this week, speaking to investors after the release of his club’s quarterly results: “Reports of the death of live sport are greatly exaggerated. I’ve just come from a Premier League meeting where research shows that the league’s global cumulative audience has increased nine per cent year-on-year, with particularly strong increases in Asia and North America.”

The preparatory phase of this process was notable for challenges to the league’s current distribution set-up, with the ‘big six’ of Manchester United, Manchester City, Liverpool, Arsenal, Chelsea and Tottenham Hotspur seeking a bigger share of international rights income in recognition of their higher profile. That attempt was blocked by the other 14 member clubs but the episode served as a reminder that, however good the rights sales unit has been to England’s elite teams, there is always an appetite for more.

Any other business?

The Premier League has already moved to address a potential wrinkle in its future relationships with broadcast partners. The subject of a winter break is a recurring one in England - which is alone among Europe’s biggest leagues in not downing tools mid-season - and after a busy festive period of fixtures which, by common consensus, produced some tired-looking performances from many concerned, the topic has arisen again.

British media reports circulated in early February which suggested that bidders had been told a winter break might be added to the calendar after 2019. An official Premier League statement was quickly issued to confirm them.

‘The Premier League has been in discussions with the FA and EFL [English Football League] for several months regarding the challenges of the increasingly congested English football calendar and ways in which we can work together to ease fixture congestion while also giving players a mid-season break,’ it said.

‘Provided space can be found in the calendar, we are open to this in principle and will continue constructive discussions with our football stakeholders to seek a workable solution.’

The timing of such a break is open to question. English soccer’s Christmas and New Year games are popular at home and abroad, with Spain’s La Liga moving to copy them in recent seasons. That could mean a break is instead inserted in January, between the third and fourth rounds of the FA Cup, but The Times has also reported that clubs would back a staggered system with teams getting time off at different times.

Irrespective of the outcome of the sales process, the other matter that is certain to come under further debate is the wider cost of English soccer for supporters. In response to a long campaign by fans’ groups, the Premier League orchestrated a new UK£30 cap on the price of away tickets once the current deal kicked in and another big increase in TV revenue would prompt demands for a follow-up.