The German football league’s rights tender for its 2025-29 cycle is designed to create competitive tension between Sky and DAZN.
Based on precedents and public statements, we would expect Sky to increase coverage and DAZN to scale it down without a head-on bidding battle.
With low international potential, the Bundesliga can only count on its deep fan base to meet competitive pressure from the Premier League.
Public service broadcasters are in a position to plan for the long term with commercial licences renewed for ten years, an updated prominence regime via the Media Bill and a government broadly supportive of the BBC.
With the Premier League and EFL rights secure to the end of the decade, Sky can plan for the future from a position of strength.
Relationships between Sky and the PSBs have improved markedly recently, and as all can now plan for the long-term, this should provide further opportunities to cement relationships for the benefit of the broadcasting ecosystem and viewers.
The value of the domestic rights of major European leagues is falling due to the declining competitive intensity between broadcasters.
The Premier League’s new rights deal extends its lead, while Serie A faces a 10% fall in revenue next season and Ligue 1 struggles to get a flat fee.
Sky and DAZN have cemented their status as Europe’s top football broadcasters. Amazon has refocused to one game per week.
BARB data indicates that the amount of average daily TV set viewing to linear TV channels is continuing to fall: the pie is shrinking. Just under 20% of TV set usage so far in 2017 is to non-linear activity, and viewing to SVOD services and YouTube is likely to account for most of this growth in 'unmatched' viewing
The pie is shrinking faster amongst younger audiences: just under one third of TV set usage is 'unmatched' now for 16-34s. However 35+ unmatched use is growing at a faster rate than 16-34 unmatched use in 2017
Within this smaller pie, the PSB channels continue to hold share of viewing against pay channels. Within the PSBs, ITV and the ITV digital channel family have gained most share so far this year, although BBC1 is having a strong autumn in spite of the loss of Great British Bake Off to C4
The recent highly-publicised boxing match between UFC superstar Conor McGregor and boxing great Floyd Mayweather has not only broken UK records, but signified the rising status of the UFC into the mainstream of sports
The UFC has grown hugely in recent years. Its competition structure, appeal to younger audiences, and savvy marketing make it attractive to pay-TV broadcasters and an enticing proposition for Millennial and Gen-Z viewers
However, with this heightened status, it may be beginning to face the same pitfalls as boxing and other sports, including a rapidly rising median viewing age and the pull of pay-per-view blockbuster events
Public service broadcasting (PSB) and the entire unique broadcasting ecosystem face huge challenges from global tech giants with deep pockets, data insights and scant regard for PSB prominence
All three pillars of the PSB model are threatened: content supply, distribution and advertising. The further threat of digital terrestrial TV (DTT) spectrum being reduced or turned off in c.2030 is real and PSBs must have a migration path in place
PSBs can counter some challenges through increased investment in content relevant to the UK consumer. But, recognising the aligned interests with pay-TV platforms of Sky and Virgin Media, collaboration between the parties is integral to the long-term future of PSB
The Premier league (PL) will be hoping for another huge increase in rights payments in the upcoming auction for the three seasons starting 2019/20.
Aggressive competition between BT Sport and Sky has led to hyperinflation of most premium sports rights. Sport now accounts for two thirds of multichannel content spend, but only 8% of its viewing.
BT’s current financial position makes it difficult to justify expansion or further hyperinflation of its PL rights portfolio, but it cannot withdraw completely.
21CF’s bid for 100% ownership of Sky has been referred for a Phase 2 investigation to the Competition and Markets Authority (CMA), which will decide by 6 March 2018
Third parties Avaaz and Ed Miliband MP complain of the influence of the Murdoch Family Trust (MFT) and family members over the UK’s news agenda and political process
A remedy could insulate Sky News from this influence. The offer of a Sky News Editorial Board at Phase 1 was refused. Third parties will ensure the debate in Phase 2 is very lively
Sky made a strong start to fiscal 2018, with improved customer net adds across each of its markets versus the previous quarter, as well as group revenue growth at 5%.
Operating profits switched back to growth, after the negative Premier League effect annualised out, with it now settled at the full cost of £1.4 billion per year. EBITDA growth hit 11%, or 15% excluding the effect of UK mobile and the Spanish OTT launch.
Against the backdrop of continued uncertainty around the UK advertising market, attention has turned to the upcoming Premier League auction, though we think it unlikely that digital players will cause disruption.
Across Europe, markets are becoming more competitive. Incumbent pay-TV paltforms (e.g. Sky or Canal+) face increasing threats from both internet-based services (e.g. Netflix and Amazon), and telecoms operators
Telecoms providers are proving the most potent challengers as they enter the premium football rights market to create attractive triple and quad play bundles – examples include BT, SFR and Telefónica. The latter is now the main pay-TV operator in Spain whereas France’s Canal+ has entered into a strategic alliance with Orange
Across the top five markets (UK, France, Germany, Spain, and Italy), Sky remains the leading operator with an estimated 21.5m video subscribers, twice as many as Netflix