Football has a name; BSkyB

Source: http://www.google.com/url?sa=D&q=http://whella.me/wp-content/uploads/2011/12/whella-sky-sports-252.jpg&usg=AFQjCNHXvsHw8uQoJdFZFaFqISCOCWb6SQ

 

 

Premier League TV Rights Deals Exceed £5billion

The Premier League has sold the rights to broadcast over 150 live games in over 25 countries from the 2013/14 to the 2016/17 season for a staggering £5billion plus, a huge increase from the £5.2 million paid for the right to broadcast 10 games in 1983 to 1985 . The UK broadcasting rights cost BSkyB and newcomer to the market BT a total of £3.108billion. The new deal is a 70 per cent increase in the value of its domestic live broadcasting rights.

BSkyB came out the clear winner in the UK after strenuous rounds of negotiations and months of strategic planning and spending. In the end they won the rights to broadcast 116 matches per year, securing the rights to five of the seven packages available. It will cost them £6.6million per game, an increase from the £4.7million it’s paying under the current deal, totalling at £760million a year.

Sky chief executive, Jeremy Darroch said:

“This is a good result for ourcustomers and for our business. It means that Sky Sports remains the home ofPremier League football and that viewers will continue to enjoy our live andexclusive coverage until at least 2016. In what was a very competitive tenderprocess, we are pleased to have secured the combination of rights that wewanted, providing certainty for us and our customers. Whilst the cost ishigher, we have capacity for this increase through the combination of excellentwork on cost efficiency across the business and choices over other futurespending. As a result, we remain confident of delivering our financial plans,in line with our expectations, unchanged, in each year of the new deal.” 

BT, who is now anticipated to launch a football channel, secured two of the broadcasting packages for £738million over the three year period. The packages mean that they have won the rights to broadcast 38 games and also have 18 of the 38 first-choice picks. BTs’ entry into the market has ousted current broadcaster ESPN who will no longer broadcast the Premier League from the 2013/14 season onwards.

Premier League chief executive, Richard Scudamore said:

 “The Barclays Premier League continues to provide excellent football and enthralling drama as we saw last season. The value this drives for our rights-holders is evident and we are extremely pleased that this has been realised for our UK live rights. As ever, the security provided by broadcast revenues will enable our clubs to continue to invest in all aspects of their football activities and plan sustainably for the foreseeable future. This deal allows them to keep delivering what fans want; top quality football in some of world’s best club stadia and an increasing focus on and commitment to areas such as youth development. These are exciting times for both the football and media worlds and we should all be proud of the value both industries contribute to the UK culturally and economically.”

Global Broadcasting

ESPN are not the only major sports broadcaster to fail to renew their broadcasting rights. In America, Fox lost out in their efforts as the free-to-air NBC has secured the exclusive American rights to broadcast live matches for a reported $250million. This is an increase from the $80million Fox paid under the current deal. Fox subsidised up to 80 games to ESPN. 

Mark Lazarus, chairman of NBC Sports Group said:

“TheBarclays Premier League is the preeminent soccer league in the world, and is onthe cusp of exponential popularity growth here in the US,” ... “NBCU willprovide the broadest programming and promotional commitment that the league hasever experienced here in the United States. The Premier League provides NBCUwith best-in-class content for 10 months of the year across our far-reachingbroadcast, cable and digital platforms. This is a perfect match.”

In Brazil, the broadcasting rights were bought by Fox and ESPN for a reported $50million. This is believed to be up to four times more than the previous deal. Other deals that have concluded range from countries like the Balkans, Mongolia and the Pacific Island’s to Belgium, France and even the rights to broadcast matches on ships and aeroplanes.

Past Deals

The first ever tv deal was for 10 games and was bought by the BBC and ITV for £5.2million for the rights to broadcast the 1983 to 85 season. The next cost considerably less, £1.1million by BBC and ITV for a single season. It didn’t take long for the prices to inflate fast. The rights for the 1988 to 1992 season cost ITV £44million for 21 games. It is in 1992 that the Premier League was established and this is reflected in the huge increase in the price for the broadcasting rights at £190million paid by Sky for 60 games over five years. That’s over £600,000 per game.

This increase in the UK broadcasting rights has been steadily ongoing ever since:

Lenght             Cost                 Broadcaster     Games

1983-85           £5.2million      BBC/ITV        10

1985-86           £1.1million      BBC/ITV        11

1986-88           £6.2million      BBC/ITV        14

1988-92           £44million       ITV                 21

1992-97           £190million     Sky                  60

1997-01           £670million     Sky                  60

2001-04           £1.11billion     Sky                  110

2004-07           £1.706billion   Sky                  138

2007-10           £1.782billion   Sky/Setanta     138

2010-13           £1.782billion   Sky/ESPN       138

2013-16           £3.018billion   Sky/BT            154

How are TV rights sold?

The rights to broadcast a premier league game is a long and arduous process. It takes months of negotiating your way through a series of rounds to buy a series of packages that contain the right to broadcast 23 matches in each package. The packages are labelled and are quite distinguishable by the “the time at which certain matches can be broadcast”.

The money from the broadcasting rights is divided up amongst the clubs at the end of every season after certain cost are deducted, and other money is given to part fund other football authorities such as the PFA, the LMA, the Football Foundation and the Football League. At the end of the 2011/12 season, the money to be divided up amongst the clubs was £1.055billion. This money is split evenly among the clubs meaning every club got £18,764,644. “Domestic cash is split three ways: 50 per cent ‘equal share’, 25 per cent dependent on how many times a club was on TV (facility fees) and 25 per cent dependent on where a club finished in the table (merit payment)”.