Market Insight

Mediapro grabs key Spanish football rights from Telefonica

December 03, 2015  | Subscribers Only

Tim Westcott Tim Westcott Director, Research and Analysis, Programming

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Mediapro won an important share of the rights to the Spanish football league for the next three seasons. The Barcelona-based rights and production company will pay €1.9 billion for the rights to eight first division matches a week as well as most of the Copa del Rey. The deal runs for three seasons from 2016/17 to 2018/19.

Telefonica will have the rights to one first division and one second division match a week and six matches from the second division playoffs. The telco will pay €750 million over three seasons for the package. Telefonica will have first choice pick for the two weekly matches
Eight more packages, including a weekly match on free TV, are still to be awarded. The league said a meeting of its Control Body would decide on the awards.

The deals announced today amount to €2.65 billion, or €883 million a season. This means that La Liga has already achieved a 47% uplift in its annual rights income with the sale of the remaining packages still to be agreed. 

Mediapro’s matches are likely to be aired on BeInSports, the Qatar-backed channel which launched in Spain on 1 July.  

Telefonica paid €600 million to acquire domestic rights to the first two divisions of La Liga and the Copa del Rey for the 2015/2016 season.

As one of the conditions set by competition regulator the CNMC for its acquisition of DTS, Telefonica will have to make its first division match available to competing platforms.
International rights to most of the 42 clubs in the top two divisions of La Liga are being sold via Mediapro, which has a five-year deal running from the current season. The league has said its revenue from international sales will be €636 million in 2015/16. 

Our analysis

For the current 2015/16 season, Telefonica has rights to the entire first and second divisions and the Copa del Rey, except for one match a week aired on public broadcaster TVE’s Teledeporte channel. Telefonica’s stranglehold  over rights to the most attractive matches in football-mad Spain has been mitigated by the conditions imposed by regulator the CNMC following its $785 million takeover of DTS, the satellite pay TV platform operating under the Canal Plus brand. According to the CNMC’s own data, Telefonica and DTS accounted for 85% of pay TV revenues in the first quarter of 2015.

Telefonica has been obliged to offer its matches to rivals including Vodafone, Orange and three regional cable companies, while Mediapro, which was forced to close its pay TV channel Gol T, left on the sidelines. The new awarded are a mixed blessing for Spanish sports fans as this season has been the first for years when they have been able to watch all matches of the first division with a single pay TV subscription.

For La Liga, the increase in rights is a successful result, although it remains to be seen whether it will achieve its target of increasing its revenue from domestic rights by 50%. The league is worried about English clubs, basking in a massive new contract for the Premier League, having the resources to lure top players away from La Liga. There are already reported to be 26 Spanish players plying their trade in England. Another consideration for the league is a more even distribution of the spoils from TV contracts. Until this season, Spanish clubs have been able to agree their own rights deals. The top two, FC Barcelona and Real Madrid, have pocketed around 40% of the TV money gained by the 20 clubs in the first division.

The question is whether the Spanish market is large enough for Mediapro and Telefonica to recoup their investment. Pay TV penetration in Spain is forecast to be 30.6% at the end of 2015, compared to 60.3% in the UK, according to TV Intelligence. While there is room for growth for a compelling pay TV proposition, the problem is that, according to our forecasts, Spain will generate €1.513 billion in pay TV revenue this year, less than one fifth of the UK (€8.092 billion). 

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