Streaming giants could win big if the soccer community can get over the Super League split
Gabriel Jesus of Manchester City and Fede Valverde of Real Madrid CF fight for the ball during the UEFA Champions League Round of 16 match between Real Madrid and Manchester City at the Santiago Bernabeu Stadium. (Photo by Manu Reino / SOPA Images / Sipa USA) ( Sipa via AP Images)
Manu Reino | SOPA pictures | Sipa USA via AP Images
The power struggle against European football has generated widespread criticism from former players, experts and politicians. Now it could reshape the broadcasting rights agreements that support the multi-billion dollar industry.
“The audience is decreasing, the rights are decreasing and something had to be done,” said Florentino Perez, chairman of the European Super League, to the Spanish television program “El Chiringuito de Jugones” on Monday.
“Whenever there is a change, there are always people who oppose it … and we do this to save football at this critical moment,” said Perez, who is also Real Madrid president, throwing the gauntlet for what could be a long and complex battle for broadcast rights.
The ESL, announced on Sunday, was formed with 12 of the richest teams in Europe to compete with the UEFA Champions League format, which is currently Europe’s best annual club competition. UEFA President Aleksander Ceferin criticized the Super League as a “shameful, selfish suggestion” and a “spit in the face” for fans.
UEFA raises nearly $ 4 billion annually from media rights in all competitions, according to its latest financial report. Broadcasting rights accounted for more than 85% of total sales, followed by commercial rights (12.8%) and tickets and hospitality fees (1.3%).
“Once you have a battle between the UEFA Champions League and the European Super League, you are effectively fighting for the same spot on a Wednesday night at 8pm European time, which will affect people’s prices.” ready to pay, “James Walton, head of Deloitte Sports Business Group, told CNBC’s Capital Connection on Tuesday.
“Nobody knows who they’re going to try to sell these TV rights yet, but the first names to add to the mix are some of the online retailers: Disney, Amazon and Netflix,” he said.
React to change
The Financial Times reported Monday that ESL organizers had early talks with Comcast’s Facebook, Amazon, Disney and Sky to secure broadcasting deals without going into the discussions.
According to a Reuters report, Facebook was not in talks on Monday to acquire broadcast rights. While Amazon has acquired the exclusive rights to show Champions League games in Italy and Germany from 2021 to 2024, sources say there are currently no talks with the European Super League.
Other broadcasters distance themselves from spitting. “We were not involved in any discussions with the proposed breakaway European Super League,” Sky said in a statement to CNBC.
Others, including UK pay-TV broadcaster BT Sport, which paid $ 2.2 billion to keep exclusive Champions League broadcast rights through 2024, have condemned the plan that sees the breakaway group undermine existing contracts and the Could threaten the future of sport.
“BT recognizes the concerns of many leading voices and fans of football and believes that the formation of a European Super League could harm the long-term health of football in this country,” BT said in a statement to CNBC.
Broadcast Cash Cow
The right to show the lucrative games is fiercely contested among broadcasters around the world who use the content to generate advertising and subscription income. However, as consumer and advertising habits change rapidly, sports fans are looking for more technologically advanced and personalized solutions to deliver high quality content at the right time and through the right channel, according to a Deloitte study.
“We don’t yet know who the broadcaster is or if someone has signed up on board, but we would expect it to be some kind of over-the-top streaming provider that wants to package this sport in different ways. ” “said Daniel Plumley, a lecturer at Sheffield Hallam University who specializes in English professional football.
“It is no coincidence for me that the timing of this announcement is related to the pandemic,” added Plumley. “We know football clubs have problems, the bigger ones too, and as in any bigger economic situation, the bigger players in the market try to capitalize on them in times of recession or financial hardship.”
Analysts say competing broadcast packages could be worth hundreds of millions a year as the shift in advertising and viewing trends and the impact of the pandemic continue to move viewers away from traditional linear television to streaming platforms.
“Both sides seem to be in this fight for the long term,” said Walton. “In the next few weeks, you can expect every day that there will be developments in this story.”
Disclosure: Comcast, which owns CNBC parent NBCUniversal, owns Sky.
Correction: Florentino Perez’s title has been updated to correctly reflect his role as President of the European Super League.