It is no secret that the right to televise football has become one of the most valuable assets not just in sport, but the world. Despite this, some of Europe's top domestic leagues are struggling to maintain the same high-value broadcasting contracts they once were able to. A number of challenges, ranging from the financial pressures of COVID-19, the threat of a breakaway Super League and the emergence of new streaming platforms, has forced a re-think about how football secures (what is typically) its most reliable revenue source. The article sets out some of the significant recent developments in the football broadcasting landscape and the key considerations likely facing the industry.

Premier League broadcasting

Ordinarily, the broadcasting rights of Europe's top domestic leagues would undergo an auction process, promoting competition and, historically, leading to inflated bids (much to English clubs' benefit, in particular). Football's reliance on broadcasting revenue was exemplified by the Premier League's (PL) eagerness to roll over its pre-existing deal with Sky Sports, BT, Amazon and the BBC worth £4.8bn, which itself (perhaps surprisingly) represented a 10% drop from the previous auction's value.

Evidently English clubs were concerned that a further drop-off might arise from a new auction cycle, a concern that would have been heightened following clubs' pandemic-induced losses. As a result, the government agreed to provide an "exclusion order" via The Competition Act 1998, which enabled the PL to renew its current deal without following the usual tender process.

PL clubs may point to significant pandemic-based losses, which could, it is claimed, lead to £2bn in lost revenue over the next two seasons. However, there is also a pervading anxiety about the competition posed by unconventional broadcast providers. Indeed Simon Green, the chief of BT Sport, claimed "there's certainly going to be a rights correction…interpreted by many as rights deflation", at the Financial Times’ Business of Football Summit.

A changing of the guard..?

Insecurities surrounding the future of football broadcasting has, in part, manifested itself in the recent tension between Ligue 1, France's top domestic league, and Canal Plus, one of Ligue 1's consistent broadcasting partners. Canal Plus actually stepped in last season to rescue Ligue 1 clubs after Mediapro, which had promised to provide €3.25bn to the top French clubs over the next four seasons, reneged on its deal 3 months in. Had it proceeded, the deal would have

represented the second largest European TV contract. The event drew criticism over the apparent lack of due diligence conducted by LFP, the French football leagues' authority, particularly after a comparable deal with Mediapro collapsed with Italy's top league, Serie A.

Since then, Ligue 1 has struck a deal with Amazon, enabling the tech giant to stream eight games each week for approximately $300m (approx. £217m at the current exchange rate) per season, while Canal Plus is tied to a $400m (£289m) deal which only provides for two games each week. Canal Plus has reacted by threatening to pull out of its broadcasting deal, of which the first instalment is reportedly due on 5 August, arguing there is a large discrepancy between the value of their rights and Amazon's.

It is possible that Amazon's broadcasting package, particularly in light of its comparative value, signals a general inclination amongst Europe's leagues to secure long-term partnerships with streamers. Indeed DAZN, a streaming service renowned for its boxing coverage, has reportedly agreed to provide Serie A €840m (£720m) per season to become the league's principle broadcaster, displacing Sky which previously provided €750m (£644m) per season. European clubs, especially the top clubs who initially spearheaded the short-lived Super League, have been pursuing new means of securing broadcasting income.

Challenges

The ever-growing presence of streaming platforms, which for many now form the primary source of entertainment, will inevitably give rise to a variety of commercial and legal issues. The divergence between traditional broadcasters and the emerging streaming powers has garnered greater attention, with Oliver Dowden (UK Culture Secretary) claiming conventional broadcasters operate with "one hand tied behind their back". This comes off the back of the UK government's plan to examine the application of Ofcom (Britain's broadcasting regulator) rules to streaming companies.

Looking forward, therefore, there are likely to be a number of significant legal / commercial issues as the broadcasting landscape evolves, including:

• Competition – if broadcasting revenues under traditional models continue to stagnate / decline, clubs may move away from auction processes and opt for private treaty sales. Not only does this create questions regarding a competitive market, particularly if streamers acquire favourable contracts, but it will be interesting to see how these changes are reflected by way of consumer access and pricing fairness.
• Piracy – will streamers be better equipped to tackle widespread piracy within the sport, which threatens broadcasting income, or will their internet-focussed platforms be further exposed to piracy? Despite a recent anti-piracy operation which resulted in the removal of 600 piracy websites illegally showcasing the current Euros 2020, the issue is clearly still pervasive as a 2020 report published by Synamedia discovered 51% of sports fans access pirated streams at least once a month.
• Corporate strategy – as is the case in any industry, the distribution of rights may be partly affected by the changing business strategy of those in the market, particularly conglomerates whose primary focus may not be in broadcasting / sports. For example, BT Sport is reportedly evaluating a potential sale of its BT Sport arm which, despite having nearly 2m subscribers, apparently costs £800m per year, with little / no profit being generated.

Conclusion

It is clear that the inherent value of broadcasting rights, and the format in which viewers consume sport in general, will continue to evolve and be shaped by the influence of streaming providers. This is likely to force long-standing football partners to revaluate the value and terms of their existing commercial contracts, the manner in which commercial partners are scrutinised (particularly as broadcasting becomes more globalised) and the process by which broadcasting deals are tendered for / renegotiated. It seems the streaming powers are to here to stay, but whether this reinvents the viewing experience for fans or consolidates itself as the status quo is yet to be determined.