Euro 2016: ITV, M6 Among Likely Beneficiaries of Soccer Tournament, Analysts Say

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Portugal's Cristiano Ronaldo is one of the soccer stars set for Euro 2016 in France.

The monthlong competition, featuring 24 teams, will add $900 million in global advertising revenue this year, estimates ZenithOptimedia.

The UEFA Euro 2016 soccer tournament, the Europe-only version of the World Cup, will kick off in France on Friday, with TV networks hoping for ratings and advertising boosts.

Media planning firm ZenithOptimedia predicts the tournament will add $900 million in global advertising revenue this year, compared with its estimate for $2 billion from the Summer Olympics in Rio and $3.2 billion from the U.S. elections.

U.K. TV giant ITV and French networks TF1 and M6, which are seen getting a boost from the 24-team competition taking place in France, will be among those industry companies that stand to gain, according to analysts. Jefferies analyst Lisa Hau called the Euro soccer tournament a “key sentiment driver” for investors in those companies.

Here is a closer look at key countries, the network airing Euro 2016 there and which stocks could benefit the most:

In France, there are security concerns following past terrorist attacks, but there also is excitement about hosting the soccer tournament. For a month, 51 matches will take place in 10 stadiums in Paris, Lyon, Nice, Marseille and other cities.

The TV rights are shared among free-to-air broadcasters TF1 and M6 and pay TV player BeIn Sports, part of Qatar-based BeIn Media Group that acquired Miramax earlier this year, in partnership with Vivendi-owned Canal Plus. M6 will air 11 matches live and has first choice for the quarterfinals and the final match. BeIn will show all 51 matches, including 18 matches exclusively. TF1 has the first choice for the semifinals and will broadcast three of the quarterfinals and six matches from the first knock-out round.

According to French press reports, the networks paid a combined €110 million ($125 million).

“M6 seems to be the obvious winner, not only because it has the final match but it also broadcasts with the newest technology,” said Liberum Capital analyst Ian Whittaker. “Overall, sports rights tend to be audience boosters rather than [earnings] drivers. The audience gap that exists between TF1 and M6 has tightened over the years and the Euro 2016 could potentially continue to do so. Such a scenario would underline again that TF1 seems to be the only Western European broadcaster whose strategic position has and is weakening over the years.”

The U.K.
In the U.K., ITV and public broadcaster BBC will share 11 group matches contested by England, Wales, Northern Ireland and the Republic of Ireland. The opening match between France and Romania will air on ITV, and the July 10 final will air on both ITV and the BBC.

ITV also will have the first pick of the round of 16 fixtures, as well as the first pick for the semifinals, while the BBC has the first pick of the quarterfinals and will be broadcasting the remaining ones.

With England looking good going into the tournament, Wales being seen as possibly providing an upside surprise and Northern Ireland qualifying for the Euro competition for the first time, interest in the U.K. is high. “We expect ITV to clearly benefit if the home nations have a strong run in the Euro in June and July,” said Whittaker.

ITV recently said its June ad revenue is looking to be up 15 percent over the year-ago period, “and this is (presumably) not assuming any strong performance by the home nations,” says Whittaker.

In Germany, public broadcasters ARD and ZDF share the rights for all the knockout-stage Euro matches. Sat1, part of ProSiebenSat.1, will air six of the first-round games, while fellow TV giant RTL has no rights.

On RTL's first-quarter earnings call, management underlined that the key question around the Euro tournament is whether ad spending will be incremental or shifted from another month.

In Italy, public broadcaster RAI will show 27 of the games, and all the matches will be available on Sky-owned pay TV operator Sky Italia.

“Mediaset will not broadcast any fixtures and consequently will be most probably impacted by softer advertising rates in June and July,” said Whittaker.

The home of the two-time defending Euro champions always has a strong appetite for soccer in the summer.

Mediaset Espana, which has held the rights throughout the national team’s winning streak of the two past Euro Cups — 2008 and 2012 — hopes to cash in again on the lucrative rights. Its Telecinco network posted the most-watched moment in the history of Spanish television for the 2012 Cup as the Spanish national team skimmed its way into the quarterfinals with more than 18.1 million viewers watching the final moments of the match that finished 1-0 against Croatia. But even that game’s average viewing figure of 14.2 million came in behind penalty kicks in the quarterfinals against Italy of the 2008 Euro Cup with 15.3 million viewers and the final game of Euro 2008 against Germany (14.5 million).

The rights were only handed out late amid debate about the cost. “The Euro rights will certainly be an audience pusher, but Mediaset Espana reckons that Spain would need to get beyond the quarterfinals for it to be a profitable event,” explained Whittaker.

The U.S.
Walt Disney's ESPN, ESPN2 and Spanish-language ESPN Deportes will air the Euro Cup in the U.S., giving them a chance to possibly draw some viewers away from the Copa America, which has been airing on Fox Sports and Univision.

American viewers tuned into the Euro 2012 final on ESPN in record numbers as soccer has continued to grow in popularity. The final drew an average of just over 4 million viewers, up 8 percent from the 2008 final.