The ever higher cost of football media rights has the potential to impact the sports betting business. Live TV coverage of Premier League matches serves the betting public’s appetite for in play betting. With rising household costs, is there a tipping point where subscribers will begin to cancel their TV packages?

Sky and Eurosport have managed to secure the German Bundesliga rights for a whopping EUR 4.6bn (GB£ 3.6bn), an increase of 85% on the last auction in 2012. Sky Deutschland has maintained the lion’s share of matches to serve its 4.5 million subscribers in Germany and Austria. Sky shares were up 3% on the announcement.
The auction represents a significant breakthrough for Eurosport which will add 40 live matches to its current menu of sporting events. In June last year it signed a EUR 1.3bn deal with the International Olympic Committee. Perhaps both broadcasters should be concerned about Amazon entering the process. They secured a digital audio package, this is the first time the US technology giant has invested in premium football coverage.

The Premier League still holds the record at GB£ 5.4bn (EUR 6.93bn). Last February Sky paid £4.2bn for five of the seven TV packages while rival BT paid £960m for the other two. The deal runs for three years from 2016. A 71% increase on the 2013-16 deal.

What about the consumer? What do they think of having to pay more? In October 2004 The European Commission asked Ofcom to assist in its investigation into the auction process of the Premier Leagues TV packages.

This is what Ofcom found:

• A quarter of the UK population are fans of the Premier League.
• Half of the fans support the big 5 clubs.
• A third of Premier League fans have Sky at home.
• Most fans on average watch one match per week.
• Six in ten Premier League fans that subscribe to SKY Sports say Premier League was the reason why.

One third of Premier League fans who subscribe to Sky Sports say they would like to stop subscribing to Sky Sports if the number of live matches shown fell by half, and three fifths say they would stop subscribing to Sky Sports if they did not show any Premier League matches. 

• When considering all Premier League fans, rather than just those who subscribe to Sky Sports, 18% say they are dissatisfied with Sky Sports. The dominant reason given is cost, with almost four fifths of fans mentioning value for money as a reason for their dissatisfaction.

This survey was completed in 2004, prior to the 2008 recession, and nearly ten years before BT successfully bid for two TV packages. Now, to ensure full Premier League coverage, the consumer has to buy both BT Sport and Sky Sports. With Bundesliga rights up 85% and with Sky subscribers telling Ofcom back in 2004 they would not subscribe to Sky without Premier League coverage, it is clear Sky has no business model without the Premier League rights. On that basis only Sky is incentivised to bid rights up in a competitive market that includes BT, Virgin and possibly Amazon who paid big money for the Jeremy Clarkson’s The Grand Tour.
Rights fees can only go up.

Unless the subscribers say ‘enough is enough. You didn’t ask what I would be prepared to pay so I will unsubscribe.’

This does have implications for betting. Subscribers that buy all the packages may continue, or stop, or take less coverage by opting for either Sky or BT. Either way, diminished access to the Premier League matches equals a smaller audience for in-play betting opportunities. Not a problem so far, but one to watch in the future especially if the economy slows and consumers tighten their budgets.

by Warwick Bartlett