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Premier League looks abroad after rights price drop

Sky News logo Sky News 13/02/2018
Manchester United's Juan Mata wearing a rainbow captain's armband last season. Pic: Premier League © Other Manchester United's Juan Mata wearing a rainbow captain's armband last season. Pic: Premier League

There have been two great maxims of English football in recent times - the national team was destined to lose on penalties, and the Premier League would always sell its rights for more than it had done previously.

One of those rules has now almost certainly been broken.

With five of seven broadcast packages sold, the Premier League’s auction for domestic rights has brought in around £4.5bn. It is a staggeringly huge amount of cash, but not quite as staggering as they would have hoped for.

Three years ago, the Premier League reaped £5.1bn. Even if they get a good price for the final two packages, high-concept packages that revolve around broadcasting ten matches simultaneously, there seems little chance that this package will extend to anywhere near £5bn.

Take a look at the price paid by Sky. It’s bought the rights to show 128 matches per season (two more than last time) and is paying £199m less per year. That’s a 16% reduction in three years - not a marginal change, but a significant one.

For BT, the deal doesn’t look quite so good. It is paying more per match and will be moving its focus away from Saturday early evenings and instead onto Saturday lunchtime.

That's a slot where Sky sometimes struggled to find an audience, so it will be interesting to see how BT attracts viewers who might well be doing other things - including setting off to a football match.

But the big stand-out fact here is not about scheduling, but money, and about why this deal looks a bit less lucrative than the one that went before. So what’s happened?

Well the bubble probably hasn't burst, but certainly it's drifted up to hit a ceiling.

For one thing, it's worth noting that, in 2015, Sky paid a lot more for its rights than anybody had predicted.

It was more fearful of BT back then, and perhaps also of a mystery digital bidder, and ended up paying 70% more than its previous rights deal. So you could argue that the 2015 deal was amazingly lucrative.

For another, the Premier League is confident that future deals for its overseas rights will comfortably make up for the shortfall.

English football is watched by more people round the world than any other league so brings with it the valuable ability to generate content that is enjoyed by a lot of people in a lot of places.

And that is the great aim of companies such as Amazon and Netflix, worldwide giants trying to satisfy rapidly growing audiences. Little wonder that they, as well as Apple and Google, have been running the numbers over a bid for Premier League rights.

And that, in turn, is bound to push up the purchase price for everyone.

So while the income from domestic rights has slipped, plenty of people within the sports rights industry believe that the overall revenue will end up considerably higher.

It may not be long, indeed, before international broadcast rights earn more money for the Premier League than the domestic deals.

However you dress it, we are still talking about huge sums of money.

A quarter of a century ago, when the Premier League was formed, the average wage of a top-flight footballer was about £1,700 a week. It’s now more than 30 times that, and there are some players earning hundreds of thousands of pounds per week.

Yes, the domestic income has dropped slightly, but it has slipped from an astronomic peak. Nobody in football is about to become poor on the back of this new deal.

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