The cost of the current UK TV auction for live Premier League football from 2016/17 to 2018/19 could top £5 billion (US$7.6 billion) for the first time, according to new research.
Ampere Analysis predicts that, based on past auctions, there will be a “competitive base rate inflation” of between 55% and 65% in cost per match this time round, pushing the cost per game to between £10.1 million and £10.8 million – compared to £6.5 million per game during the last rights auction.
With more games available this auction and companies including Al Jazeera, Discovery Communications and Vodafone rumoured to be in the running against current rights holders Sky and BT, Ampere estimates the total value for live rights will be between £1.7 billion and £1.81 billion a season – or £5.1 billion to £5.4 billion for the full three seasons.
The research firm said it believes a “sensible” price for the current rights would be around the £4 billion mark. In July 2012 Sky and BT paid £3 billion to carve up the matches between 2013 and 2016.
“In the world of European sport, the Premier League is the ultimate luxury brand. As such, it is hardly surprising that there is a disconnect between price and direct value,” said Ampere research director and former Screen Digest analyst Guy Bisson.
“Looking at the increases in fees paid at past auctions for the live rights for the Premier League gives some indication of where we can expect the price per match to be. However, as we’ve seen recently in the art world, prices paid at auction have a habit of surpassing even the most bullish of predictions. And like fine art, some would argue the Premier League was priceless.”
Even at a “more sensible” lower rate of inflation of 50%, Ampere predicts that one game would cost £9.8 million, with the total season of 168 matches valued at £1.6 billion. At this price, a three-season deal would hit £4.9bn.
Last week, UK broadcast regulator Ofcom rejected calls by Virgin Media to delay the current Premier League TV rights auction, claiming there is no “urgent need to intervene.” Virgin had called for a temporary halt to the auction while Ofcom concluded an ongoing investigation into the sales process.
Ampere Analysis is a new analyst firm, founded in September 2014 by former IHS Screen Digest analysts Bisson, Richard Broughton and Dan Stevenson.