Originally Posted by
mogzyboy:
“I thought that this was worth posting on here folks:
http://www.theguardian.com/media/med...-league-rights”
Originally Posted by 1andrew1:
“Thanks mogzyboy, a good find. In particular.
"Many analysts reckon those prices [£40pm for BT Sport if it acquires the bulk of the Premiership matches in 2015 for £1.2bn+] are simply not economic, especially not for sport alone. So the challenges for BT are formidable. Its executives can keep flashing the cash and driving up rights costs, but in the course of doing so will create a mighty rod for their own backs. Which is why some of the smart money is saying that BT's shareholders might well call a halt before the next Premier League auction risks even more of their cash."
Interesting commentary and the revenue analysis from Enders matches what mlt11 has been saying if I remember correctly.”
Thanks - yes, that is a very good article by Hewlett.
Some of his numbers are a bit off - there aren't 2.5m with the combination of BT broadband/Sky TV (actually more like 1.5m as another article said recently) and approx 7m take Sky Sports (6m Sky platform; 1m other platforms).
But the key point in the article which is correct is this:
If BT wins 116 PL games at the next auction, BT's annual sports costs in the year 2016/17 will almost certainly be higher than Sky's total sports costs today.
BT will be spending more on just two contracts - ie PL + CL - than Sky spends in total on all sport today.
BT would undoubtedly be the number 1 must have football channel but it would barely have scratched the surface across the whole spectrum of other important sports where Sky is strong - cricket, F1, golf, tennis, rugby union, rugby league etc. Only other notable contract so far is Aviva.
BT is not going to get anything remotely like 7m homes to subscribe to a channel which is so weak outside of football. And yet it would have a cost base higher than Sky's total sports cost base today.
One stat not posted on here for many years is a useful x-ref:
Sky won exclusive live PL in 1992. By 1997 Sky had 3.5m subscribers. Then in the next two years the number of Sky subscribers actually fell - by 1999 there were just under 3.5m. At that point Sky didn't just have exclusive live PL - they also had FL, 1st pick FA Cup games and all home England games.
Some of the 3.5m would have been non-sports so the sports figure was actually lower - probably in range 2.5m to 3m as sports was a higher % of base back then.
I think it gives a feel for how many paying subs football can get on its own - that was a very, very strong football portfolio. So if in that scenario (ie BT with a totally dominant football portfolio of broadly equal strength to Sky's late 1990s position) BT could only get 3m paying proper full sports subs or even a few more the numbers on the face of it look horrendous - ie higher cost base than SS today but only half the number of subs of SS today.
Not to say they might not go for it as a massive loss leader with a view to attempting to do massive damage to Sky which could in turn bring huge long term benefits. But it has to be a very high risk manoeuvre - not in sense it could bankrupt BT as BT could easily afford to absorb the losses - but in sense it would take a very big slice out of BT's profits.