Skip to Content
Money

Why now for European football’s Super League? Mega TV deals

MGN

One of the week’s most prominent sports stories — plans for a new European Super League (ESL) featuring 12 of the top soccer teams on the planet -— is not really a sports story. It’s a media story.

On Sunday six English clubs — Arsenal, Chelsea, Liverpool, Manchester City, Manchester United, and Tottenham Hotspur — alongside three from Italy — AC Milan, Inter Milan and Juventus — and three from Spain — Atlético Madrid, Barcelona and Real Madrid — laid out plans to form a breakaway circuit.

The announcement sent shockwaves through the soccer world, prompting outrage from fans, players and even politicians. UK Prime Minister Boris Johnson tweeted that the plans “would be very damaging” and “would strike at the heart of the domestic game.”

These teams are some of the most valuable franchises in the world, and there are many reasons for this change (and vitriol). But the biggest has to do with TV.

“It’s that gap that creates the value”

One the biggest incentives is the potential television distribution deal and “the large sums of money that comes with it,” said Lee Igel, a professor at the NYU Tisch Institute for Global Sport.

“It’s really just about how much these clubs feel could be earned if this competition existed,” Igel told CNN Business. “That’s based on what the revenue structures are, both in terms of current television deals and the set up of the competitions themselves.”

How much money are we talking about? Patrick Crakes, a media consultant and former Fox Sports executive, said the rights to these competitions and leagues are “already worth billions.” This new league, in its final form with a total of 20 teams, would lead to “an incremental lift in that number.”

Crakes explained that in the last 20 years there’s been a “rapid acceleration [in the value] of all sports media rights.” Still, as streaming becomes a dominant form of how audiences watch TV, it also has created a fractured media environment. And that, according to Crakes, has had an outsized impact on the value of live sports.

“It’s not so much that people aren’t being reached anymore on established platforms, they’re just spending less time with it. Things like sports have been less impacted by that,” he said. “The difference between sports and everything else was always kind of big, and now even as sports viewership has gone down some, the gap is even wider. It’s that gap that creates the value.”

A clear example of the power of live sports for both traditional TV and streaming platforms was the NFL’s recent renewal of its media rights with its broadcast partners. The deal was valued at more than $100 billion. The league’s traditional partners — CBS, NBC, ABC/ESPN and Fox — all retained their rights for the next decade while digital giant Amazon Prime secured the exclusive rights to stream Thursday Night Football.

“People still tune in for live sports”

So if this Super League becomes a reality, who in the streaming world could most benefit from having the exclusive rights to broadcast it?

Domestically, it would have to be a “streaming service attached to powerful established platforms,” in order to be able to pay the sky-high rights fees, according to Crakes.

“Many of the same players that won the NFL bid will be in competition for this,” he said.

NBCUniversal’s Peacock and ViacomCBS’ Paramount+ might be good fits since they already have soccer on their services. Disney, which owns ESPN and ESPN+, could certainly be interested. Amazon has shown that it’s invested in live sports since it was a major part of the new NFL deal.

However, Amazon Prime Video Sports tweeted on Tuesday that it has not been “involved in any discussions for this proposed Super League.”

“We are proud to offer our Prime members the football which matters most to them and to present the action in the most innovative ways, including UEFA Champions League football in Germany and Italy and Premier League football in the UK,” the company said.

Internationally, Sky Sports, which is owned by Comcast, also said it’s not been involved in any discussions about the ESL, adding that it is “completely focused on supporting our long term football partners in the UK and in Europe.”

“In the last 24 hours Sky Sports has passionately articulated the views of football fans on the importance of preserving and sustaining the whole football pyramid,” the company tweeted.

BT Sport echoed that message, tweeting that it recognizes “the concerns raised by many of football’s leading voices and fans,” and “believes the formation of a European Super League could have a damaging effect to the long term health of football in this country.”

Of course, it’s still too early to tell if the ESL will come to fruition and what that will mean for potential TV and streaming partners. Yet, the mere announcement of the league underscores the evolution of the TV marketplace and soccer’s growing global appeal, Igel said.

“International football is already an immensely popular sport around the world, and it’s still on the rise,” he said. “It’s live sports, and people still tune in for live sports.”

CNN Newsource

Comments

Leave a Reply

Skip to content