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English Premier League TV rights value falls for India

MUMBAI: Like the fall in the Indian stock market, the value of the English Premier League (EPL) as a TV property has taken a steep fall.

It has been learnt that Star, which was earlier paying $145 million for three years, is paying around $99 million under the new deal. On an annual basis, the property value would thus drop from $48.33 million to $33 million in the new cycle. This can be seen as an overdue correction.

Star’s senior executives could not be contacted for comment.

“This is a big drop but a sign that the management at both Star and Sony now understand the value of the EPL better after the bidding frenzy last time,” said an industry source.

Another source noted that while the EPL was a major driver for ESPN in the old days when ESPN and Star had a JV, the value of the rights was much lower at that time.

“Every property has a realistic price point. No television property is an exception to this. The EPL will drive subscription revenue, but the growth in revenue has to justify the price. If it does not, then it becomes a loss maker. You also have to factor in the limited ad inventory available on soccer compared to cricket. I think that cricket prices will continue to see acceleration,” the source added.

The scene in Europe is different, which is not surprising given that the sport is hugely popular in those markets. “Europe is still largely up for the EPL. There have been big increases in France, Germany and Norway,” added the source.

Asia, however, is largely down in terms of the rights value that the Premier League gets despite increases in Hong Kong, Indonesia and Japan, the source said.

Another source pointed out that sports broadcasters in India are in a consolidation mode. “People are looking closely at their balance sheets. People are focussing more on the vision of where sports broadcasting will be at five years down the road. The era of threat from competition has reduced to some extent for non-cricket. Star has now got their own leagues like the Indian Super League (ISL), where they have a stake. Star’s sports investments have been so heavy. Now they are in the consolidation mode.”

“Ten Sports is sticking to what they have been doing for the past couple of years. WWE, Uefa Champions League and the five cricket boards are enough for them. Adding the EPL to the line-up might not have moved the needle much in terms of getting additional distribution income. Neither Ten Sports nor Nimbus was interested in the EPL. The interest was from Star and Sony.”

The source added that for Sony the EPL was not a must-have unlike the IPL, which drives their distribution bouquet. “Sony already has the Fifa rights. Then they added a layer to that with properties like SerieA. They are not that desperate for the EPL.”

The source also feels that F1 is the next property that might see a correction when those rights come up for grabs. “You need to note that earlier sports broadcasters were in an expansion mode. That is why Fifa got a good deal from Sony. At that time, they needed to grow their sports business beyond the IPL. Now the market has changed. Unless a property has an impact on the distribution bouquet such as the IPL or BCCI rights, you will not see much growth in the prices,” he said.

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