BSkyB Faces ESPN Competition for English Soccer League TV Rights
LONDON -- Bids for the TV rights for soccer games in the English Premier League are due Friday, with observers expecting the rights to be divided up between long-time rights holder BSkyB and smaller holder the Walt Disney Co.'s ESPN.
Al Jazeera English is being viewed as a potential dark horse by some in the blind auction, expected to raise £2 billion ($3.1billion)-plus for the league, for the live TV rights, which could be decided within days or within weeks, depending on the offers and whether the Premier League asks for second-round bids.
Investors in BSkyB, which has held most of the English soccer rights for two decades, are closely following the outcome. "The BSkyB model is built predominantly around premium live sports rights, with the English Premier League the jewel in the crown," explained Peel Hunt analyst Patrick Yau.
"It will be very material," said Claudio Aspesi, analyst at Sanford C. Bernstein. "Many investors have been concerned by the threat of competition for the rights, with the attending fears of cost inflation and/or loss of key rights."
The rights for the 2013-14 British soccer season are being offered in seven packages that cover a total of 154 matches on offer, up from 138 so far. A single company can only own a maximum of 116 matches or five games packages per season.
A decision could come as early as late tomorrow or, more likely, in the coming days or, if second-round bids are requested, weeks.
Analysts expect ESPN, which bought its first Premier League games in 2009 when Setanta Sports went under, to at least bid for its current package of 23 games and additional matches to get it to close to 40 matches a season at the least.
"I suspect that ESPN will be the other main bidder, having now gained some experience of the U.K. market," said Yau. "I think it will end up as the credible number two to Sky, very much mirroring the current situation." He added: "I don't see it going too far beyond that as I'm not sure it has the appetite to go head-to-head withBSkyB."
Meanwhile, BSkyB, in which Rupert Murdoch's News Corp. owns a 39 percent stake, needs to win the maximum five packages allowed per bidder out of seven total packages to keep investors happy, analysts said. "They need five out of seven and renewal at plus 5-10 percent [in terms of cost] for shareholders to be happy," said Barclays Capital analyst Julien Roch.
Other analysts are expecting a 10-20 percent price increase for BSkyB over the £1.62 billion($2.52 billion) it had paid in thelast rights auction. "Anything within this range should be taken well.". "A much lower or higher price will matter," said Aspesi. "If Sky were to lose a substantial part of the rights, the impact would be even more dramatic."
Al Jazeera's name has come up mainly because the Arabic news network has acquired French soccer rights, including rights to air all games of the Euro 2012 soccer championship that starts Friday night.
"I don't think that it will want to build a big position in the U.K. market to go alongside its French football coverage," predicted Yau though. "I it didn't bid in the recent German Bundesliga rights auction." He expects the Qatar-based network to use France as a testing ground for its sports strategy.
Other rumored bidders for the Premier League rights have in recent months included broadcasters ITV and Channel 4, which most observers believe to have decided against a bid, telecom companies, and even Apple, which seems focused on other issues though, and Google/YouTube, which seems content though to focus on teaming with rights holders that use sports clips on their YouTube channels.
For most companies it won't make sense to startinvesting in soccer in a small way, and a major play for a big chunk of therights will prove expensive, analysts say. Said Yau: "To make the pay TV model for sports rights cost effective, scale is very important, so I can't see many others wanting to bid for the smaller packages of rights individually."
Yahoo is widely tipped as the key contender again for a Premier League online highlights rights package.