Market Insight

Sky and Perform win rights for Serie A for next three seasons

June 14, 2018

Matteo Marchello Matteo Marchello Senior Research Analyst – Channels, Programming, IHS Markit

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After more than a year, Italy’s Lega Calcio Serie A has awarded domestic rights to the country’s top football championship for the next three seasons, with Perform Group entering the market for the first time alongside incumbent Sky.

Perform, which operates the DAZN online subscription platform in five countries, won one of the two packages, comprising three live games on Saturday night and on Sunday lunchtime. It will pay €193 million per season from 2018/19 to 2020/21. Sky won two of the three packages on offer and will have the rights to seven games every week, paying €780 million a season. Mediaset Premium, which has aired Serie A since 2004 and held Champions League and Europa League rights for the last three seasons, was left with nothing.  

The allocation process has taken more than a year, with three different calls for bids. After apparently coming to a conclusion three months ago, when Spanish agency Mediapro acquired all rights as an intermediary. It has since been confirmed that Mediapro wanted to operate a channel (as it currently does in Spain in partnership with BeIn Sports). Whether this possibility was allowed by the Lega or not was unclear; according to Sky Italia, that role would have gone beyond the intermediary role defined by the call for bids. Therefore, Sky appealed to the civil court of Milan to clarify Mediapro’s role. In the meantime the company, now under Chinese ownership, decided not to cover the payment established by the contract signed. In the latest phase of this telenovela, the Serie A clubs decided to cancel the deal signed with Mediapro and begin an entirely new process.

Last week, the Lega released new packages and began negotiations with the TV operators. For the first time, in line with other European countries, rights were marketed in packages of kick-off times rather than (as before) by platform. The first package is made up of 114 games, three every matchday, one played at 6pm on Saturday and two on Sunday at 3pm and 8.30pm. This was won by Perform.

The second package includes 152 games, four per matchday (one on Saturday at 3pm, two on Sunday 3pm and 6pm and one on Monday at 8.30pm). The last one includes the remaining 114 games, three per weekend to be played on Saturday (8.30pm) and on Sunday (12.30 and 3pm). Sky won these packages.

All the packages were sold on an exclusive basis and with a ‘no single buyer’ rule, meaning that one operator cannot buy all the 380 games in the league.

The €973 million paid by Sky and Perform is only fractionally more than the annual value of the live rights in 2017/18, which was €966 million. The Lega Serie A failed to achieve a minimum price for the rights set at €1.1 billion, and also less than the €1.05 billion that Mediapro agreed to pay.

Our analysis

The sale by event of the rights to broadcast Serie A in Italy represents an important turning point for the allocation of rights. It was a necessary development to bring the process on track after 12 months of impasse and to encourage operators to develop alliances and new strategies.

The outcome can be considered positive for the Lega, even though the revenues are lower that the minimum guarantee, as the allocation of the rights has been particularly difficult and at different stages of the process it seemed that the operators were not interested enough to justify the investments requested.

Sky has confirmed its leadership role in the Italian market for broadcasting premium sports events. For this three-year cycle, from 2018/19 to 2020/21, it will pay €780 million to broadcast a total of 266 games, while in 2015 it paid €663 million for all the 380 games of the championship; an increase of 68% of the value per game. This growth can be justified by the general European trend on the value of the football league rights (a 60% increase of the domestic value of Ligue 1 in France and 70% for Premier League in UK) as well as the exclusivity of the content available.

On the other hand, Mediaset’s failure to secure any rights in the auction confirms the strategic uncertainty about the future of its pay TV operation, weeks after it lost the rights for the Champions League from 2018/19 to Sky. While Mediaset and Sky have agreed a channel-sharing deal, but it has not been confirmed whether Mediaset will be allowed to distribute Sky's sports channels to its customers on digital terrestrial (DTT).

The most interesting part of this process is the arrival of Perform Group. The company, headquartered in London, operates DAZN – the only digital-only platform broadcasting exclusively sports. DAZN has launched in Austria, Switzerland, Germany, Japan and Canada. It owns rights for Premier League and the two UEFA competitions in Germany and to the J-League and Nippon Baseball League in Japan. A launch in the US is also in the works after Perform agreed an eight-year joint deal with Matchroom Boxing which will stage 16 fights a year.

In 2018 Perform announced the expansion of its service to other countries for 2019 and today confirmed that Italy will be one of those. DAZN will launch from the start of the football season, with a price of €9.99 a month, with the first month offered free. 

Geography
Italy
Organization
Mediaset Perform Sky Italia
Research by Market
Media & Advertising
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