Bids for Premier League domestic broadcast rights have to be submitted by the end of next week for the blind auction. A potential new bidder has emerged in the form of the Discovery channel which has held talks with Premier League chief executive Richard Scudamore.
Discovery is best known for nature documentaries, but it now controls the Eurosport channels and wants to break into Premier League football. This could lead to even more inflation in the cost from £3bn for the last three year deal to around £4bn this time.
Bids for Premier League domestic broadcast rights have to be submitted by the end of next week for the blind auction. A potential new bidder has emerged in the form of the Discovery channel which has held talks with Premier League chief executive Richard Scudamore.
Discovery is best known for nature documentaries, but it now controls the Eurosport channels and wants to break into Premier League football. This could lead to even more inflation in the cost from £3bn for the last three year deal to around £4bn this time.
Sky is at greatest risk in this round with a big chunk of its profits in jeopardy. It would like to curb the inflation in costs and has tried to broaden its appeal to viewers. But, at the end of the day, its command of the best Premier League football matches remains crucial.
Of its 11.5 million pay-tv customers, around 4 million subscribe to the sports channels. Its deals with pubs and clubs, which bring in £250m a year, rely on Sky offering a large selection of football matches. Research by Merrill Lynch suggests that if Sky were to lose the majority of the Premier League matches, an estimated 30 per cent of its sports customers would leave.
BT has big pockets and has used football as a loss leader to prevent broadband customers defecting to its rivals, in particular the 2 million or so who also paid for Sky TV. However, BT is more cash constrained. The deficit in its pension fund may lead to top up payments increasing from £325m a year to around £700m.
It will also need to borrow several billion pounds to fund the proposed takeover of EE, Britain’s biggest mobile phone provider. BT is aiming to sign up customers to so-called quad-play offerings of landline, mobile, pay TV and broadband. Sky’s lack of a mobile phone network would put it at a marked disadvantage, although whether British households are keen on this kind of offer is open to question.
Whatever happens, Premier League football is going to be even richer and the gap with the Football League will widen.