Media Uncategorized

Premier League may soon generate more TV money than the NFL

With the haul expected from its upcoming rights deal, the Premier League is approaching NFL-level TV revenues.

(PAUL ELLIS/AFP/Getty Images)
(PAUL ELLIS/AFP/Getty Images)

The Barclay’s Premier League will begin accepting bids from broadcasters for the league’s domestic television rights beginning for the 2016-17 season.

The Premier League’s current TV rights holders in the United Kingdom — Sky and British Telecom — paid a combined £3.018 billion ($4.72 billion) for a three-year agreement to broadcast 154 live matches per season. The deal marked a 77 percent increase over the previous one, and if the league is able to generate a 50 percent increase this time around as many predict, its new deal will eclipse £4.5 billion ($7 billion).

The Premier League can expect a rights fee increase due in part to measures taken to improve the package’s appeal on the marketplace. Much like the NFL opened up the Thursday night broadcast window to expand its TV revenues, the traditionally Saturday/Sunday/Monday Premier League will buck tradition and offer up to 10 Friday night games. The league is also increasing the number of games sold from 154 to 168 (44 percent of league matches). No single rights holder can purchase more than 126 games.

(PAUL ELLIS/AFP/Getty Images)
(PAUL ELLIS/AFP/Getty Images)

The numbers stand out when considering the NFL generates upwards of $5 billion from all of its media and broadcasting arrangements. But unlike the Premier League, the NFL offers 100 percent of its 256 regular season games (the Premier League doesn’t have a postseason) to broadcasters.

The fact the Premier League can approach those revenues highlights not only how tremendously popular the league and sport is in England, but how different the sports business landscape is in the United States. The NFL is the biggest TV draw, but it faces stiff competition from the other three major sports leagues and several other, albeit smaller, leagues. And of course there’s also college football and basketball. The Premier League doesn’t have these challenges.

(Photo by Matthew Lewis/Getty Images)
(Photo by Matthew Lewis/Getty Images)

The Premier League uses its position of prominence domestically to increase demand for its product. At least one British media company is arguing that by limiting the supply of matches on the market, the Premier League has unfairly inflated the price broadcasters have to pay. As a result of a complaint levied by Virgin Media, Ofcom, the United Kingdom’s communications regulator, has opened an investigation against the league’s practices.

Considering that the Premier League’s U.S. rights went to NBC Sports for $250 million over three years, media companies in the United Kingdom have a legitimate gripe; they’re forced to bid way more for less content. The NBC deal includes over 196 live matches on TV and hundreds more hours of live match content streaming online.

Yet when looking at the per-game costs, Premier League TV rights still look like a good deal to broadcasters. If the rights fees increase by 50 percent as predicted, the winning bidder is looking at a price close to £10 million ($15.7 million) per game. CBS, Fox, ESPN and NBC shell out $19 million per NFL game as a collective average.

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