Can Sky survive without the Premier League?
Top domestic football has fuelled Sky's success, so could the broadcaster prosper without it, Maisie McCabe asks.
As football clubs up and down the country prepare to resume battle in the 2014/15 Premier League season this weekend, executives at BSkyB and BT are also limbering up.
The tender for the next auction of Premier League rights is expected to land in October or November.
The stakes are high, the competition fierce and both broadcasters are going to need to put out their very best teams.
Three years ago, BT’s full-blooded challenge (when it bid for each of the seven packages while everyone was distracted by the supposed threat from Al Jazeera) took everyone by surprise. And analysts expect BT to go in even harder this time around.
In April, HSBC went as far as telling clients that BT is "likely to win" the auction.
Although much has been made about the threat from over-the-top players such as Netflix, in reality, they do not really have the established revenue resources to be players in this game.
In November last year, BT outbid the incumbents, Sky and ITV, to become the first broadcaster to have exclusive rights to the Uefa Champions League and Europa League. BT’s £299 million-per-year deal is more than twice of what ITV and Sky currently pay for matches under the existing arrangement, which runs out at the end of the 2014/15 season.
If the current £3 billion Premier League deal marked a 70 per cent increase on the one before it, the next auction will ramp things up again. Yet, after years of diversifying its schedule, Sky would argue it has done more than enough to compensate for fewer football games. The coverage is only believed to account for about a tenth of Sky’s £660 million annual ad revenue.
Last time, there was a proviso preventing any single broadcaster from picking up all of the rights. Insiders suggest that, although that clause has expired, it is in the Premier League’s interests to have multiple broadcasters competing against each other.
But even if Sky only secures a minority of Premier League games, it would mark a significant shift in its offering. After all, Sky was built on the back of the Premier League.
So, can Sky survive without at least some rights to top-flight football in the UK?
This article was first published on campaignlive.co.uk
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