Market Insight

SFR and Altice score European football rights in France

May 11, 2017  | Subscribers Only


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French telecoms group SFR and its parent company Altice have acquired exclusive rights in France to the Champions League and Europa League for €350 million ($380 million) per season for three years starting in 2018/19. The rights are currently held by BeIn Sports, Canal Plus and M6. The payment represents a 60% increase on the current deal for 2015-2018.

Our analysis

When SFR snatched the rights for the Premier League from Canal Plus in 2015, it did not have a dedicated sports channel. The telco created five SFR Sport-branded channels, and added other events including English club rugby and French athletics to its rights portfolio. Recently, SFR management have admitted that the increase in the number of subscribers was above their forecasts, justifying their choice of bringing more sports rights on board. The best European teams are usually involved in the Champions League and French players are playing all over Europe, adding to the appeal of the competitions in France.

By paying an additional 60% more, SFR is increasing the pressure on Canal Plus and BeIn Sports. SFR’s competitors are currently struggling with inflation in the cost of sports rights and subscriber losses. SFR is also creating a multi-media universe, bundling SFR Presse (newspapers) and SFR Play (SVoD) with its sports channels. SFR Sport has adopted an aggressive pricing strategy. Its services are available over-the-top (OTT) for €9.99 per month with no minimum engagement. In comparison, BeIn Sports costs €15 a month and Canal Plus for €45 a month (a package that includes BeIn Sports).

The move by SFR and Altice follows a similar strategy to UK telco BT, which made a surprise bid for Premier League rights in 2012, competing with Sky in the pay TV market. In 2015, BT acquired exclusive rights to both the Champions League and Europa League, replacing Sky and ITV. It has recently renewed its contract for three seasons ending in 2021. BT will pay £1.18 billion over three years, or £393 million ($507 million) a season. The new deal including highlights, currently held by ITV, was worth 31% more than the previous agreement.

Both operators have used exclusive access to sports to back their challenge to a pay TV market leader. Competition from BT has certainly not dislodged Sky from its position as the main player in pay TV sport in the UK and Ireland, but BT has reinforced its broadband business by the offer of premium sport, signed up more subscribers for its pay TV service, and forced Sky to dramatically increase its outlay on Premier League rights. The issue both for BT and SFR is whether the heavy investments they have made in securing sports rights are sustainable in the long term and whether they can be matched by gains in revenue.

For UEFA, the renewal of key agreements in the UK and France represents a strong start to the licensing of rights for the 2018-2021 contract cycle. Up to now, UEFA has typically licensed rights to free-to-air operators as well as pay TV and done separate deals for the Champions League and Europa League. Exclusive deals with pay TV platforms is a new strategy that has so far borne fruit - though question marks remain over the impact of the lower audiences that pay TV will deliver on advertising and sponsorship revenues.    

 

Geography
France UK
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