Football’s rights inflation

English Premier League clubs prefer soaring TV rights revenue instead of streaming

The clubs fear the risk of expensive streaming and lower revenues. They prefer sticking to their massive broadcasting rights revenues. Since the PL was formed in the early 1990s, clubs have enjoyed rights hyperinflation. Broadcasting rights deals soared from £241 million in the 1992 to 1997 period to £3.2 billion in the 2010 to 2013 cycle. They then surged by a further 188 per cent to £9.2 billion ($12 bn) for the three year 2019 to 2022 deal. In other words, the current agreements have raised annual rights to just over £3 billion.

Nordic and Singapore deals

 UK broadcasting rights are now £5 billion ($6.5 bn) . Sky and BT, are the main holders, but Amazon was allotted 20 games at the end of last year.

Since 1992, overseas rights have soared a hundred-fold to £4.2 billion ($5.5 bn).

Singtel, which holds Singapore’s rights, has not disclosed what it paid to the PL. There are many football supporters in Singapore, so the cost is likely to be sizeable. The combined 2022 to 2028 Nordic rights deal for Sweden, Norway, Denmark and Finland amounts to £2 billion.

Bulging rights payments have to be recovered with high subscriptions. Singapore supporters who watch live games in the early hours of the morning have complained about Singtel’s PL subscription costs. They obviously prefer cheaper streaming subs.  

Premier League studies streaming possibilities

The PL has examined a potential dedicated streaming service, Premier League chief executive Richard Masters disclosed. The PL may introduce pilot streaming schemes when the current broadcasting rights end in 2022. Supporters would pay the PL directly. In return, it would stream live matches and highlights to them. The service would function alongside broadcaster games.

“We invested a lot of time and resources in building our expertise and capacity in direct-to-consumer (streaming),” Mr Masters said at a recent briefing. “We considered whether it would be the right time to test a few markets but decided not to.”

Mr Masters added that eventually, the Premier League may decide on a mix of broadcasting and direct streaming to consumers.

Premier League executive director Bill Bush confirmed that a direct PL streaming service was an option. But for the foreseeable future, the clubs will remain with British and overseas broadcasters.

The PL has “done a fair bit of direct-to-consumer testing, Mr Bush said. “Obviously we’d move in a flash” if streaming boosted the global football audience.

“But at the moment the balance is still very much with a territorial broadcaster,” he said.

The PL would not comment whether it was considering outsourcing the expensive streaming process to Amazon, Netflix or other providers.

Streaming advantages for the clubs

It is hardly surprising that clubs prefer massive broadcasting revenues. In the long term, however, cheaper streaming could extend the global supporter base to multi-billions. Surveys show that youth TV viewing has been falling. The PL also has expensive large legal and technical teams to counter pirates. A low-priced PL streaming service could discourage supporters from viewing illegal pirate channels.  

Top clubs take the lion’s share of rights revenue

In the 2018 to 2019 season, the PL’s 20 clubs shared a total of £2.46 billion from TV rights. The top six received 36 per cent of the total because they performed the best. Manchester City, the PL winner last season, received £151 million; Liverpool, the runner up, £152.4 million. Chelsea, Tottenham Hotspur, Arsenal and Manchester United each received £142 to £146 million. Huddersfield at the bottom of the league still managed to be paid £96.6 million.

A sizeable proportion if the money went to transfer rights and player salaries. In the summer, for example, Manchester United paid Harry Maguire a record £80 million for a defender.

© Neil Behrmann

 For entertainment and investment ideas, take a look at Neil’s books. They can easily be found via his author page on Amazon  

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