THE AGREEMENT HAS BEEN signed, sealed and delivered, and Facebook makes official that it has secured the media rights for LaLiga in the South Asian market for the next three-year cycle.
As reported in June by SportzPower, the social media behemoth will hold digital and broadcast rights to the top flight of Spanish club football for the Indian subcontinent – covering India, Pakistan, Afghanistan, Bangladesh, Bhutan, Nepal, Maldives and Sri Lanka.
The big question of course was around the platform Facebook would partner with for television broadcast in India. For it stands to reason that in bandwidth challenged territories like the Indian subcontinent, digital-only broadcast on Facebook Live alone would have been a “deal breaker” for LaLiga, more so since it has identified India as among its key international growth markets.
SportzPower can now confirm that Facebook has closed a rather complex agreement with Sony Pictures Networks India – LaLiga’s incumbent broadcast partner for this territory – wherein SPN will continue to telecast the league. What is even more interesting is that as per the agreement that Peter Hutton, FB’s head of Global Live Sports Programming, has secured with SPN, the network’s OTT platform Sony LIV will continue to live stream the Spanish league.
It bears noting here that when SportzPower last reported on the subject in June, this website’s considered opinion was that it was highly unlikely that the two big daddies of Indian sports broadcast – Star India and SPN – would be interested in picking up just the “television piece of the LaLiga pie”.
The fact that LIV will continue to live stream LaLiga alongside Facebook Live, makes clear the picture on that front.
As far as acquisition costs are concerned, another presumption that SportzPower had made was that the new deal would likely see “a significant mark-up” in value terms. That also has not happened. Instead, there has been a significant fall in price paid.
As per information available with SportzPower, when SPN last acquired four-year LaLiga broadcast rights, it had paid something in the region of $25 million, or $6.25 million a year. Sources close to the developments have informed this website that the price at which Facebook has secured its current deal is $13.5 million all told or $4.5 million a year. it bears noting though that Facebook will also do production around the big games. To quote from the official release, “In addition to the live matches, shoulder programming, including a full range of weekly preview shows and highlights, will be offered.”
Coming as it does on the back of the fact that SPN retained rights in the Indian subcontinent for the UEFA Euro 2020 as well as three-year rights for Serie A at a 15% and 25% mark downs respectively, the developments have set alarm bells ringing among the people that matter in the Premier League as well as UEFA (which has the Champions League and Europa League rights coming up for bidding).
Considering that Star India’s current Premier League deal was itself a massive come down from the previous cycle (from $145 million to $90 million), the million dollar question is how much further the price will go down. That it will go down, as too will the UEFA rights is a given. By 50% is the percentage drop in value one top broadcast executive has thrown at SportzPower.
Another channel head, while disagreeing that there would be such a massive drop in value, offered some perspective on the matter as to why ESPN Star Sports (which held the rights then) had paid out $145 million over three years beginning with the 2013-14 season, a more than three-fold increase from the $45 million it had paid during the previous cycle.
It had nothing to do with value and everything to do with ESPN Star Sports wanting to ensure that rival SPN (then known as Multi Screen Media) was denied a high profile bread and butter property for its new sports channel SIX, which it had just launched.
If that be the case, SportzPower would argue the true value of Premier League rights should be looked at thus:
1. For the 3-year cycle beginning with the 2013-14 season, ESPN Star Sports should have actually paid only $50 million.
2. Assuming a 20% mark-up because of the additional revenue potential that OTT platform Hotstar brought to Star Sports, the true value should have been $60 million and NOT $90 million.
Which would imply that if we accept a 20% increase in value (from $60 million) as being the maximum TRUE value for the upcoming cycle it should be in $72-$75 million range as the BEST CASE SCENARIO that the Premier League can expect for the next cycle of rights out of India when they come up for tender in January. Time will of course prove whether SportzPower is right on the money as regards these assumptions but let it be said that this website would be more surprised if the price was significantly higher than this number than lower.
POSTSCRIPT: On a related note, SportzPower’s bet is on Premier League and UEFA Champions League and Europa League staying with incumbents Star Sports and SPN respectively when the media rights come up for tender.
To sum up, SportzPower expects the television broadcast of high profile / value international football to stay with the incumbents for the next cycle… All at discounted prices from the previous cycle!
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