Premier League auction hits record £5.1bn

Sky has retained the bulk of live Premier League football for upcoming seasons, but upped its spend as the latest UK TV rights auction hit a record £5.14 billion (US$7.89 billion).

There had been talk of Discovery Communications weighing in on the bids for its Eurosport channel, but the outcome sees 21^st Century Fox-backed satellite operator Sky and telco BT contining to carve up live games.

Sky secured five of the seven TV packages for the three seasons from 2016/2017 through 2018/2019, with BT taking the other two.

Sky will pay £1.39 billion per year for the rights, a total of £4.2 billion for the three years, which marks an 83% increase on the cost of its existing contract.

For this, Sky will air 126 fixtures per season, compared to 116 currently, and has secured rights for Friday evening matched for the first time. It will have 26 first picks and 31 second picks for the top games.

BT will pay £320 million per season, a total of £960 million for the three seasons, with the cost of its contract rising by a total of 30%.

For this, it will air 42 Premier League matches per season, compared to 38 currently, with the new rights allowing BT to show a live Saturday evening game every Premier League weekend.

The total £5.14 billion paid between the broadcasters marked a 71% increase on the TV current rights and surpasses many analysts’ predictions.

Sky said that while the price paid per annum is around £330 million more than analysts’ forecasts, it has a “clear set of plans in place to fund the bid and deliver its financial plans in line with expectations”.

It said that it would “work hard to minimise the impact of higher rights costs on customers,” adding that the majority of the funding will come through additional savings generated by efficiency plans.

“This is a good result and confirms that Sky is the unrivalled choice for sports fans. We went into the Premier League auction with a clear objective and are pleased to have secured the rights that we wanted,” said Sky CEO Jeremy Darroch.

However, Shy’s hare value opened this morning 5% down, meaning almost £900 million had been wiped off the company’s overall value. Conversely, BT’s share price was up 4%.

Joshua Raymond, senior market analyst at broker City Index said that Sky has been “forced to pay over the odds” to secure prime packages including the Sunday lunchtime kick offs.

“I expect Sky shareholders to react warmly to this latest victory but in the medium term, there has to be a deeper concern on the spiralling prices paid but broadcasters,” said Raymond.

“The big news is that the total prices paid broke £5bn to hit £5.136bn, a jump of more than 70% on the same package last time around and a new record. This is a huge jump and shows the huge competition BT posed in forcing Sky to bid to new heights.”

John Petter, BT Consumer CEO said: “I am pleased we will be showing Premier League football for a further three years and that we have secured the prime Saturday evening slot. These new rights will enhance our existing schedule of football, rugby and other international sport, including all the live footballing action from the UEFA Champions and Europa Leagues starting this summer.”