Sky seals £1bn Premier League television deal 04/02/2009 |
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English football’s television rights bonanza was in full swing last night as Sky paid more than £1 billion to secure its grip as the main Premier League broadcaster. The company has kept its hold on the majority of live games, 92 out of the 138 matches available, by retaining its four existing packages.
With the Premier League going to a second round on the other two outstanding packages, an auction thought to involve Sky, Setanta and ESPN, the 20 clubs will be hoping to exceed the £1.7 billion from the 2007-10 deal and set a record.
The bids arrived yesterday at the League’s legal offices and Sky, the satellite broadcaster that is 39.1 per cent owned by News Corporation, parent company of The Times, ensured that it would not lose its dominant position by keeping the premium slots, including the Sunday 4pm kick-off.
Although the Premier League declined to comment, sources disclosed that Sky had kept its four packages. No figures are known, but it is believed that the company will have paid close to the present £1.314 billion.
Only once in the League’s history have domestic live rights failed to rise, in 2004, when they dipped from £1.1 billion to £1.024 billion, and there was a huge leap three years later.
The clubs certainly set about the January transfer window as though confident that the revenues would not drop away. Barclays Premier League clubs spent a record £160 million, defying the credit crunch that has afflicted so many businesses. While Arab wealth at Manchester City accounted for some of that spending, it is the television income that underpins the League’s finances.
Under European Union regulations, Sky is entitled to own five out of the six packages, and with ESPN, the Disney-owned broadcasting giant, joining the bidding — and Setanta desperate to keep the two packages it bought for £392 million last time — there will be a further round of bids.
The process is kept so secretive that none of the companies knows who it is bidding against, or how many rivals are involved. Sky was always expected to step up to the plate for the 2010-13 rights. Half-year results announced last week showed operating profits up 31 per cent to £385 million.
Broadcasters remain confident in the strength of the Premier League to attract subscribers. Money from the television companies has attracted some of the world’s leading stars and two English clubs, Manchester United and Chelsea, contested the Champions League final last May. It is the most popular league in the world and, having recently missed out on the rights for German football, ESPN is known to have set about securing a significant presence in Europe by winning Premier League rights.
Club chairmen will receive an update when they gather in London tomorrow. They will be relieved to know that the majority of the money has already been banked. On top of Sky’s input, the league has also sealed a deal with BBC for the 2010-13 highlights package for £173 million, slightly above the existing cost.
Setanta will be the most anxious of the bidders, having established itself in the market through its Premier League rights.
More than £5 billion has been ploughed into the English game by the television companies since the formation of the Premier League and Sky’s initial £304 million investment. From the strength of the bidding yesterday, it seems as mutually beneficial a relationship as the day it started.
(Source: Timesonline.co.uk)
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