Call to cut soccer viewing costs as Sky pays less
Ireland’s leading consumer advocate has called on Sky to cut the costs of premiership soccer subscriptions after it emerged it will pay 16% less per game in the latest auction of English Premier League rights, write
However, Dermott Jewell, policy adviser at the Consumers’ Association of Ireland, said shareholders will likely be the main winners, despite Sky also tapping the huge surge in the value of the euro against sterling since mid-2016, to boost profits from the business it does in the Republic.
It emerged that Sky has snagged more rights than ever — and paying less to boot — to broadcast England’s top soccer championship through 2022, a bonus for US suitors 21st Century Fox, Walt Disney, and Comcast. The broadcaster won the bulk of the Premier League rights in an auction result but will pay 16% less per game, offering buyers comfort about the profit outlook of its pay-TV business.
Sky, the subject of a takeover bid from Fox, rose for the first time above the offer price on speculation its minority shareholders will push for a richer deal.
Sky shares gained over 3% to over 1,093p, about 1.7% higher than Fox’s bid for the UK-based broadcaster. Fox is awaiting UK regulatory approval to buy the remaining stake of Sky that it doesn’t already own and has agreed to sell the broadcaster to Disney as part of a $52.4bn (€42.5bn) film-and-TV asset deal. Comcast is also said to still be eyeing some of Fox’s assets, driven by its interest in Sky.
However, Fox faces the prospect of another hurdle in its bid for Sky, after a UK High Court judge allowed a legal challenge to proceed over whether the pay-TV provider would remain fit to hold a broadcasting license under the control of media billionaire Rupert Murdoch.
Sky and rival BT Group are together paying £4.46bn (€5bn) for most of the rights over the three seasons, compared with £5.1bn (€5.7bn) in 2015. It’s the first time in 15 years that the per-game price has declined, signalling a more rational approach by the broadcasters after years of rampant price inflation. Two packages of less desirable rights are still left to auction.
“The lack of content cost hyper-inflation eases the path to the attraction of Sky to suitors,” Neil Campling, a senior analyst at Mirabaud Securities wrote in a research note.
Premier League soccer has long been key to attract and retain TV and broadband subscribers and the cost of the UK rights has surged 30-fold over the past 25 years.
Media and telecom carriers had been bracing for the potential of having to shell out even more as web giants including Amazon and Facebook dip their toes into sport to expand their video businesses.
Both companies have struggled to justify to investors paying more for sport as the rights have become richer. BT has competing demands for its cash, including a fibre broadband roll-out and gaping pension deficit, and Sky has been emphasising its investments outside soccer, including its studios business.
Inconsistent viewing patterns for sport in recent years have also spurred questions about the value of the rights. Viewing in the UK this season has been up about 4.5% over last, based on preliminary figures for the first two-thirds of matches, according to a source.
- Irish Examiner and Bloomberg staff
