On Tuesday, the Premier League announced that it had agreed a £4.5 billion deal with both Sky and BT for the sale of UK broadcasting rights for a total of 160 Premier League matches during the forthcoming 2019/20, 20/21 and 21/22 football seasons. The 160 matches were split into five separate packages of 32 games, with Sky the successful bidder for four of the packages and BT one.
The Premier League had placed a further two packages – each for 20 matches – up for auction, but they were unsold in the first stage of the process.
The current deal for UK broadcasting rights to Premier League matches expires at the end of next season. That deal, signed in February 2015, is worth more than £5.1bn to the Premier League and entitled Sky to broadcast 126 matches, and BT 42, over the 2016/17, 17/18 and 18/19 seasons. That three-year deal agreed between the Premier League and Sky and BT represented a major jump from the previous £3bn three-season contract that expired at the end of the 2015/16 season.
"The spectacular recent rises seen in the value of the UK broadcasting rights deal for Premier League matches have seemingly stalled, for now at least, but this latest deal still represents significant investment in the Premier League matches and brand by Sky and BT, and dwarfs other broadcasting rights deals in other European leagues," said Julian Moore of Pinsent Masons, the law firm behind Out-Law.com.
"While both Sky and BT will be paying less per match than they are contracted to do under the existing agreement, this is more of a sign that the market has plateaued than of its collapse, particularly since everything points to the Premier League obtaining an increase in the value of international broadcasting rights during the next auction of its kind," he said.
Moore said that the "rationalisation of the market" could be attributed to a reduction in the competitive tension between Sky and BT in recent times, as well as a lack of real competition from technology companies, despite rumours of their interest in the rights.
"One of the factors that has perhaps driven the reduced prices paid in this auction is the absence of real intense competition in the market – since the current contract was agreed, Sky and BT have agreed to a cross-carriage arrangement which will allow Sky subscribers to view BT Sport channels and vice versa," Moore said.
"In addition, it seems that none of the social media giants or digital platforms rumoured to have been interested in seriously competing for rights in this latest auction are quite ready yet to do so and to go head-to-head with Sky or BT for the key rights packages. Despite obvious technological advancements in recent years, there appears to be some underlying doubt about the ability of communications networks to support the live streaming of matches at such a mainstream level," he said.
Moore said that the two lots of matches that remain to be sold are experimental packages that represent an expansion of the rights on offer under the current broadcasting deal in the UK.
The Premier League has said that there is remaining interest in those two packages from "multiple bidders". One of the packages provides rights to broadcast every match scheduled from two rounds of fixtures on a bank holiday and midweek, while the second package relates to every game from two midweek rounds of fixtures.
Various reports have credited Amazon, ITV, BT and Sky among those interested in acquiring the rights to those final packages.
The Premier League could decide to lower its reserve price and open another round of bidding for the remaining rights, or could decide itself to retain the rights itself and broadcast the matches through a new 'direct to consumer' platform, Moore said.
"If those packages are not acquired, one option it could pursue is the development of its own platform for delivering those games direct to consumers. We have already seen this in the US where some sports, such as baseball and American football, are made available by the competition organisers and rights holders through OTT platforms such as Apple TV and Amazon Prime," Moore said.
A direct to consumer model could be supported by consumer subscriptions and/or through revenues obtained from sponsors or through advertising, Moore said, and would give the Premier League valuable access to consumer data. In many ways the Premier League is already equipped to adopt this approach given that it already invests in, and controls, the broadcasting of the games shown on BT and Sky, he said.
"A direct to consumer platform would be a bold approach in the European rights market," Moore said. "The impact such a move could have on the value of rights in future auctions could be significant – if the Premier League shows it is serious about a direct to consumer offering then this would in effect represent a new competitor for the rights and could force the traditional broadcasters and any new players in the market to increase the amount they are willing to pay in future to acquire those rights."