More for less for Sky at Premier League sale in buyers’ boon

  • Investment
  • Thursday, 15 Feb 2018

LONDON: Sky Plc is paying less for more UK rights to show Britain’s top soccer championship through 2022, a bonus for suitors 21st Century Fox Inc, Walt Disney Co and Comcast Corp.

The European broadcaster will keep the bulk of the Premier League rights but pay 16% less per game, offering buyers comfort about the profit outlook of its pay-TV business.

Sky and rival BT Group Plc are together paying £4.46bil (US$6.2bil) for most of the rights over the three seasons, compared with £5.1bil in 2015.

The auction result on Tuesday came as Fox awaits UK regulatory approval to buy the remaining stake of Sky that it doesn’t already own. It’s agreed to sell the broadcaster to Disney as part of a US$52.4bil film-and-TV asset deal.

Comcast is also said to still be eyeing some of Fox’s assets, driven by its interest in Sky.

It is 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 simple conclusion is that the broadcasting battle between Sky and BT is over,” Neil Campling, a senior analyst at Mirabaud Securities in London, wrote in an e-mailed 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 even more inflation as web giants including Inc and Facebook Inc dip their toes into sport to expand their video businesses.

Analysts had largely been forecasting that the inflation would continue, with Credit Suisse seeing a 30% to 40% rise and Ampere Analysis expecting a 15% gain.

The absence of a strong showing from the digital players and a content-sharing agreement between Sky and BT signed in December may have contributed to the restrained bidding. — Bloomberg

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