Market Insight

Lega Calcio aims for wider pool of bidders with new Serie A rights tender

May 30, 2017

Matteo Marchello Matteo Marchello Senior Research Analyst – Channels, Programming, IHS Markit
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Italy's Lega Calcio Serie A has restructured its packaging of rights for the next TV contract with the aim of attracting bids from telcos and online platforms. As before, the packages, running from the start of the 2018/19 season for three years, include satellite and digital terrestrial (DTT) rights similar to those currently held by incumbents Sky and Mediaset, but these packages do not include online, IPTV or mobile rights.

The 20 teams involved in Serie A, Italy's top football league, have been split into two groups, the first one made up of eight teams: the three leading teams in terms of the number of supporters and results, the team with the lowest rank according the two criteria mentioned above and the three teams promoted from the second division (Serie B). 

Packages A and B would ensure the owner the rights to show every game played by these eight teams included in the smaller pool respectively on an exclusive basis on satellite and digital terrestrial television respectively. 

Packages C1 and C2 each contain the rights to broadcast on internet and mobile platforms all the games played by the eight teams split into two sub-groups. This new set of criteria has been chosen with the aim of creating two groups of teams equally appealing to audiences and the likely bidders. 

The rights concerning the remaining 12 teams are included in the last package (D), which is built on a non-exclusive platform basis.

The guidelines concerning the three seasons starting from 2014/2015 allowed the owners of each package to broadcast games on internet platforms as well as either satellite or DTT on an exclusive basis. 

Another innovation introduced in this call for tender is the increased number of time slots available to play games over each ‘regular’ weekend of the football season; for the next three seasons there will be eight slots, three more than the five available for the past three seasons. It will become usual to have games on Saturday in the early afternoon (3pm), on Sunday at 6pm, and on Monday at 8.30pm: three slots that have been used only rarely in the past.

Our analysis

The changes in the allocation system aim to increase the number of competitors and consequently stimulate competition between operators. Creating a set of standalone packages for the pure internet-based platforms should give the right incentive to potential entrants to step into the market. Telco operators – such as Vodafone Italia, Telecom Italia or Wind – could enter the market, as they potentially would have the technical infrastructure to broadcast online the games included in one of the two packages C1 and C2. Other bidders likely to be interested include Discovery, Amazon and Perform Media, which will all have packages for Germany's Bundesliga from next season.

It is also likely that the new allocation system would lead to a restraint of the acquisition costs for the rights of Serie A. In fact, the most likely outcome of the process seems to be a scenario where Sky and Mediaset will retain exclusive rights on satellite and DTT, paying an amount of money fairly close to the reserve price set by the football association, which is €600 million ($670 million) on each platform. On the other hand, platform-neutrality might lead to a scenario of price escalation for package D, which the two incumbents would be expected to bid for. The total price paid for packages C1 and C2 – which is currently almost impossible to forecast – will determine the increase from the previous deal.

The Lega Serie A has set a minimum price for all the packages equal to €1 billion per season, which is already higher than the total amount agreed in the previous deal (€966 million). The extent of the increment will depend on several factors; the strategic decisions taken by new entrants will probably be the most important one. 

After the competition issues arising from the last contract round, the AGCM (Italian Competition Authority) made recommendations to the Lega Calcio about the call for tender before their publication last week.

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