On Tuesday last week, the English
Premier League announced that Sky
Sports and BT Sport have won the
Leagues domestic television rights
at mind boggling cost of $7.9 billion
over three years starting in the
2016-17 season, an incredible 70%
increase over what theyre currently
paying. Those figures caught the
attention of your blogger that led him
thinking what the windfall means to
football clubs in the Barclays Premier
League and the fans across the
World and in particular Football mad
continent of Africa.The TV rights deal
could well see the cost to broadcast
those games rise in Africa where
Manchester United, Arsenal, Liverpool
and Manchester City have cult like
following. With the international
bidding next to get underway after
United Kingdoms Sky and British
Telecoms paid a kings ransom to
broadcast the games for the next
block of three seasons, all eyes will
be on just how much South Africas
DSTV will be willing to pay for the
rights for sub saharan Africa with
exception of Nigerian market where it
has competitor.The BPL television
rights for three seasons starting from
the 2016/17 season was
astonishingly higher than the
previous TV deal in the United
Kingdom, with the cost of the rights
driven up by fierce bidding from not
just Sky and BT but other companies
too, according to official bidding
report.With the price of United
Kingdom rights ballooning, the cost
of international rights are expected to
rise but not by the quantum seen in
England.
English Premier League Logo
International rights for the current
block of three seasons which ends
after the 2015/16 season. Its been
reported that the sale of the current
overseas rights to broadcasters in
Africa was £205m.The expectation is
that it could rise by as much as 25%
for the upcoming auction. DSTV has
been mum over just how much it
paid to buy the current rights but it
has been speculated to be as much
as £400m from the current £205m
for sub saharan Africa. Analysts say
the price for the rights to broadcast
the BPL in Sub Saharan Africa was
driven up by emerging media
companies bankrolled by wealthy
businessmen interest the last time
around. As the bidding was done
without the knowledge of what rivals
have put on the table, the cost to
secure the rights had escalated in
the previous bidding process in part
out of fear of losing the rights. The
Premier League does not set a floor
price when it seeks to sell rights in
regions like Sub Saharan Africa but it
will seek a higher price.DSTV may
not pay more than what it did for the
current rights but that depends on
what other broadcasters will do,
says a Johannesburg based analyst I
spoke to last Friday.A number of
media companies are interested in
bidding in the upcoming auction for
the Sub Saharan Africa rights. They
sees value in adding content such as
the BPL to drive subscribers to their
network, similar to the strategy
employed by British Telecom in the
United Kingdom. The question is just
how much they will pay.
Supersport, a South Africa based
channels currently controls Sub Saharan
Africa Premier Leagues rights except
Nigeria and its available on DSTV, a Pay-
Tv company
The cost of securing the rights on a
per-subcriber basis will be high
given that some have a smaller base
compared to DSTV.In its marketing
strategy, DSTV claims its service is
more than 50% of households in the
continent but with about half of
DTSVs customers taking its prized
sports package where its key asset is
the BPL games, the loss to such
rights will hurt the South African
company.According to a friend
familiar with the matter,DSTV has
maintained that it will not overpay to
keep the rights to broadcast the BPL
but that remains to be seen.
Previous increases in the cost of
content rights for sports have been
passed on to subscribers of the
sports package but there could be a
limit just how much more
subscribers will be willing to pay to
watch the BPL on DSTV that is
synonymous with the European
Football.Keeping the rights at an
affordable price will be important to
DSTV given that its last reported
quarter has showed some strains in
its business. Experts say it missed
earnings estimates and revenue and
cost pressures have
emerged.Analysts point to a decline
in the Pay-TV and Super Pack
subscribers on a quarter-to-quarter
comparison, believing that
emergence of more pay-Tv providers
is hurting its business. An insider I
spoke to sometimes last year
believes DSTV will give up exclusive
rights to certain programmes in order
to lower its costs but that hasnt
happened yet.DSTV has the flexibility
to re-negotiate terms with their
content providers in order to manage
costs and am one of those who think
content cost has been closely
watched at South Africas company
where it wants to keep such costs at
around a third of revenue. The
weaker rand against the US dollar
will not affect DSTV for the
foreseeable future.
