Telefonica is paying €2.94bn ($3.98bn) to screen games over three years between 2019 and 2022; current owner Mediapro will continue to own broadcast rights in public spaces such as bars, the Financial Times reported.
Telefonica already shows games, paying a fee to Mediapro which also resells to Telefonica’s competitors, Orange SA and Vodafone; cutting out the middleman means a real terms price drop of as much as 5%, given that it now controls the production and distribution of broadcasts.
Some analysts doubt, however, that Telefonica can make the deal profitable, even as others suggested that it could bring the company additional negotiating power in the forthcoming review of Champions League rights, which are also held by Mediapro.
In a filing, Telefonica maintained that the purchase represented a “slight deflation” versus the 2016-2019 cycle, according to SportsPro Media.
The direct entry of telecommunication carriers into this space has seen prices for rights inflate over the past decade, as telcos increasingly offer added content perks as part of a broadband offer.
Meanwhile, the entry of new digital players, such as Amazon, which bought the right to broadcast at least 20 English Premier League matches to Prime members beginning in the 2019-20 season, has raised expectations that broadcast rights prices will only increase.
The news also follows AT&T’s acquisition of the adtech firm AppNexus, which was widely welcomed as a diversification of the digital advertising market. It also speaks to the need for telcos to expand their offer vertically, as AT&T continues to eye Time-Warner as a source of content.
Sourced from the Financial Times, Sports Media Pro; additional content by WARC staff