Telefonica secures big La Liga rights win in US$3.98bn auction

Spanish soccer league also nets 30 per cent uplift for international audiovisual rights.

Telefonica secures big La Liga rights win in US$3.98bn auction

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Spanish telecommunications company Telefonica has outbid its main rival Mediapro for the bulk of broadcast rights to La Liga, the top-flight of Spanish soccer, in an auction that raised €3.4 billion (US$3.98 billion).

The three-season deal increases Telefonica’s grip over La Liga matches starting in 2019. The sale sees a €450 million (US$525 million) increase on the combined €2.95 billion (US$3.4 billion)that Mediapro, Telefonica and others offered for the prior three years.

Telefonica’s chief operating officer Angel Vila had previously indicated a more modest approach to the company’s rights bidding approach while it focused on reducing debt.

‘The award was made at an identical price for each of the three seasons (US$1.1 billion), which equates to a slight deflation versus the last season of the 2016-2019 cycle,’ Telefonica said in a filing. ‘Telefonica has always defended that the [La Liga] matches are a very attractive content, but that its acquisition had to be carried out at the appropriate price. The offer made by the company meets these parameters.’

After the latest auction in 2015, Mediapro, which doesn’t have a major broadcasting platform of its own, promptly resold its rights to Telefonica, Orange SA and Vodafone Group Plc.

Telefonica was awarded the two main packages, for nine matches each week in Monday’s auction. Mediapro was awarded rights to one match each week, along with highlights and broadcasts in public spaces, such as bars and restaurants. Rights to Spain’s Copa del Rey were not included in the package offerings.

While recent rights auctions in England and Italy have dipped in relative value, the sport has benefited from steep inflation over the past decade as telecommunication carriers began competing with broadcasters for content that could help them retain broadband subscribers. New interest from web giants including Amazon.com Inc. has raised some expectations that rights values will keep soaring.

Barcelona-based Mediapro has dominated global broadcasting rights for Spain’s top soccer matches and the rights in Spain for the Champions League, Europe’s top club competition. In May, Mediapro beat other bids for televising French matches, making the company the leading distributor of two of the region’s top five leagues. The Spanish TV producer also saw a bid for domestic Serie A rights end in a bitter court case with Sky and DAZN ultimately picking up the pieces.

While only four of the eight packages on sale on Monday were awarded by the league, the auction raised 15 percent more than the previous tender, La Liga said in an emailed statement.

La Liga president Javier Tebas wants to shrink the financial gap between the Spanish tournament and England’s Premier League, the world’s wealthiest soccer league. Tebas has said that he expects the two leagues to be practically equal within 10 years.

Meanwhile, La Liga has also extended its partnership with Mediapro for the sale of international rights.

The new five-year deal, which covers the period between 2019/20 and 2023/24, will guarantee La Liga €4.485 billion (US$5.9 billion) in revenue, marking a 30 per cent uplift on the previous three-season cycle.