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New deal is 70% higher

English Premier League TV deal with Sky and BT worth £10 million a game

Premier LeagueSky shares closed 2.2% down today after it raised the stakes substantially to acquire the lion’s share of the English Premier League television rights.

Together with BT it has agreed a new live television deal with the English Premier League that will mean each game is worth £10 million.

The total package will cost £5.136 billion, with Sky winning five of the live game packages and BT Sport two. The new deal, a 70% rise on the current agreement, runs from 2016 to 2019.

It will see Sky broadcast Friday night Premier League games for the first time and also on Saturday afternoons, Sunday afternoons, Monday nights and bank holidays. BT Sport will show games on Saturday evenings and midweek. Both broadcasters presently pay on average £6.5m per game.

The key points of the new Premier League rights deal include:

  • More live matches than ever before, with 126 fixtures a season versus 116 under the existing contract
  • Live coverage on more days of the week, with matches on Friday evenings for the first time as well as Saturday afternoons, Sunday afternoons and Monday evenings
  • Sky to get 26 first picks and 31 second picks, meaning that Sky Sports will offer more of the biggest matches
  • Live coverage of every Premier League club at least four times a season
  • Rights to offer live coverage across a range of platforms, including online and mobile
  • Access to all 126 matches a season through the Sky Sports day pass and week pass on NOW TV
  • BT will screen 42 live matches across the three seasons – an increase of four on the current contract.

Jeremy Darroch, Sky’s Group Chief Executive, said: “This is a good result and confirms that Sky is the unrivalled choice for sports fans. We went into the Premier League auction with a clear objective and are pleased to have secured the rights that we wanted.”

Premier League chief executive Richard Scudamore says the £5.14billion raised from television rights will help the lower reaches of the game.

He said  the deal would mean that grounds will remain full during over the three years of the deal.

“This outcome provides a degree of certainty so clubs can continue to invest and run themselves in a sustainable manner; it also allows us to start planning how the Premier League can continue to support the rest of the football pyramid from the grassroots upwards.

“This structure also allows us to strike a balance between match-attending fans and those who choose to watch on television. Keeping grounds full is a priority for the Premier League and our clubs, and I am sure the flexible ticketing policies that have helped keep attendances so high will continue to develop.”

The Discovery Network – owners of British Eurosport – and beIN Sports were thought to be in contention but they couldn’t rival the capital of Sky and BT.

The first five years of the Premier League – 1992-1997 – saw 60 games a season sold to Sky for £190 million, with the 2001-2004 deal breaking the £1billion mark for the first time.

Analysts’ reaction:

Stephen Williams, equity analyst at Brewin Dolphin:

Sky has announced that it has won the UK rights to 126 premier League matches a season from 2016/17 to 2018/19. It has won five packages of live rights, including the two most attractive ones, and will now have the Friday night slot along with Saturday afternoon, Super Sunday, and Monday Night Football. BT will pick up the Saturday evening fixture and the midweek game.

However, the packages have been won at a high price. It will pay £1,392m per annum for each of the three years, representing an 83% increase over the cost of the existing contract. This equates to an increase of 70% per game after allowing for the increase in the number of games (£11.05m per game). It currently broadcasts 116 Premier League football matches per season, having paid £760m per annum until 2015/16.

Given that the total value of the Premier League rights was £5.136bn, BT will be paying £320m per annum for its 42 games (£7.6m per game), up four from the games it currently has but first picks will fall from 18 to 12. This is only 30% more than at the last auction. BT will no doubt be looking rather more smug at the outcome as management stressed its “financial discipline” and will not be spreading its financial resources too thinly now it has EE to integrate.

As no single buyer was allowed to acquire more than 126 matches, Sky has pitched aggressively and won. The amount is around £330m more than analysts’ forecasts (consensus was a 40% increase in the cost) so the negative market reaction was expected given that it will hold back growth in earnings per share from 2016. It will no doubt share the cost with subscribers of Sky Deutschland and Sky Italia.

Consensus estimates for Sky are unchanged as yet with operating profits estimated at £1.63bn for 2016 and £1.65bn for 2017 with earnings per share of 61.6p and 63.3p respectively. Sky says that it will work hard to minimise the impact of the higher rights costs on customers with the majority of funding coming through substantial additional savings to be delivered by efficiency plans.

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One Comment to English Premier League TV deal with Sky and BT worth £10 million a game

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