The Outlook for European Football Media Rights

The business model of European football has seen profound changes because of the pandemic and its aftermath, revolutionary changes in the media, and the influence of private equity. New financing sources, new ways of handling media rights, and new business opportunities for clubs and leagues are three major and interrelated ways the business of football in Europe has been transformed.

The initial spark for change was the pandemic. When ticket sales dropped, owners looked for new revenue sources and saw an opportunity in the sale of media rights. This was made possible by the ongoing transition to direct-to-consumer and over-the-top streaming in major markets. Digital-first platforms, including Amazon, DAZN, and Viaplay (formerly Nordic Entertainment, or NENT), have emerged as significant competitors and buyers of football rights.

Seeing an opportunity, private equity firms have increased their participation in media rights and ownership vehicles, such as the CVC partnership with La Liga in Spain. Regulatory changes, particularly in Italy, have supported the ability to do longer-term deals and sell rights exclusively to a single buyer in some territories. In all, the changes have sharpened the focus on maximizing media rights revenues.

Media Rights Deals

Over the last year or two, all the main football leagues have been involved in media rights deals, and one trend that stands out is the importance of international markets in the overall revenue pie. For the Premier League, fees from international rights in the 2022-2025 period were greater than domestic rights fees for the first time. International rights are also important to La Liga and, to a lesser extent, the French League, where international interest remains somewhat subdued. But international rights and the continued growth of betting video rights have helped all leagues grow their overall media rights income.

The sale of rights in many cases is driven by national regulation, which can be restrictive. But those regulations are evolving. There is a good chance that in the next rights cycle further domestic restrictions (such as the U.K. TV embargo of 3 p.m. kickoffs) will be relaxed, since a precedent for that was created during the pandemic when stadiums were closed. Ultimately, the competition for rights is a function of the number of platforms that have an interest. In the U.K. and France, there has not been much competition for domestic rights. In Germany and Italy, however, there is a healthy competitive dynamic. For licensing income to continue its growth, there must be multiple bidders. It’s as simple as that.

Rise of Digital-Only Media

The rise of digital-only players around the world is likely to expand the number of bidders. In the Nordics, Viaplay is a major sports player while Eleven Sports has been a participant in bidding for rights in Italy and Belgium, for example. Outside of Europe, several significant digital-only players have emerged, including Amazon and Apple in North America and Paramount+ in the U.S. and Latin America. The fact that those companies now see live football rights as a significant opportunity to acquire and retain subscription over-the-top (OTT) customers is a good development for the industry.

Acquiring Media Rights

The tender processes for media rights among the main leagues are very similar. Typically, the process starts 18 to 24 months before the end of the current rights cycle, with the domestic market usually the priority, followed by international markets. Respondents to the tenders include agencies, distributors — the traditional TV broadcasters as well as streaming platforms — and, increasingly, betting operators and betting rights aggregators (Sportradar, Stats Perform, IMG Arena etc.). Sometimes buyers are approached on their own, but very often they all respond to the same invitation to tender.

Global Media Rights

Because overseas broadcast and commercial partnerships are becoming so important, many leagues now have offices in Southeast Asia, China, the Middle East, and the U.S. These leagues are investing time and resources in building relationships locally with their media distribution partners, and it’s paying off. The leagues are tailoring their rights packages to meet the needs of each market, instead of going out with a one-size-fits-all packaging approach. This customization often results in doing longer-term deals in core markets like the U.S. and China. Leagues are also retaining agency partners to help with production, distribution, and promotion of their live content in a way that is tailored to the needs of each market.

In the U.S. there has been a bit of a gold rush with traditional broadcasters looking to acquire high-quality exclusive content for their direct-to-consumer platforms. Paramount, formerly ViacomCBS, has made a big splash in this space in the last few years, buying up the UEFA Champions League and Italian Serie A. ESPN has made deals with La Liga and Bundesliga. NBC, along with its Peacock platform, has renewed its partnership deal with the Premier League in a six-year agreement worth around $2.7 billion, a significant increase over the previous deal. On the domestic side, Apple has signed an exclusive partnership with Major League Soccer for all rights starting in 2023.

All this points to a continued increase in the value of football media rights, driven by the direct-to-consumer transition. While there may not be net growth in audience, especially as more and more of these leagues go behind subscription pay walls, more live game product is available in more markets than at any other time in the history of European football.

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About David Sternberg

David Sternberg is an independent consultant at his own consultancy, Claygate Advisors. Before creating his firm, he was Chief Executive Officer, Rugby International Marketing at USA Rugby and Head of Media at Manchester United. Earlier, he was Chief Executive Officer at Universal Sports Networks and Executive Vice President and Chief Operating Officer at Fox Networks Group.

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This media and entertainment industry article is adapted from a June 23, 2022, GLG Teleconference, “European Football Media Rights — Market Update and Outlook.” If you would like access to this teleconference or want to speak with media and entertainment industry experts like David Sternberg or any of our approximately 1 million experts, please contact us.

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Questions asked during the teleconference:

• Could you give an overview of the European football media rights landscape?
• How has PE activity changed European football media rights?
• How will financing via media rights change now that fans are once again allowed back into stadiums?
• Can you give an overview of the status of football broadcasting rights in Spain, Germany, the U.K., France, and Italy?
• How do obligations and competition for rights differ across those main European leagues?
• Could you give an overview of the competitive dynamics?
• What are the main advantages for European leagues to build an OCT product versus just selling the rights?
• How does the tender process for football media rights work across the main European leagues?
• How are the leagues trending from region to region?
• Can you run through how overseas broadcast partnerships work?
• From a viewership perspective, what’s happening in the U.S. market regarding European leagues and their overall popularity?
• What factors do you consider when assessing valuations of media rights?
• What would the risks be if a Super League was created?
• What do leagues look at when trying to sell media rights?
• To what extent could new entrants make larger and more established players obsolete over time?
• How do contracts work between leagues and broadcasters in terms of length, and how often can they be negotiated?
• To what extent do you see the new private equity involvement in both leagues and clubs driving up the value of media rights?
• How do you think inflation will affect clubs over the next year or so?
• What is your outlook on European media rights?
• Is there anything we haven’t mentioned?