Market Insight

Telefonica regains TV rights to La Liga

June 27, 2018

Tim Westcott Tim Westcott Director, Research and Analysis, Programming

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Telefonica has regained control of most of the rights to Spanish first division football from the start of the 2019/20 season, with challenger Mediapro losing all residential domestic rights. 

The Spanish incumbent telco was awarded two packages which include exclusive rights to nine of the ten first division matches played each week, paying a total €2,940 million ($3,422 million) from 2019/20 to 2021/22. Mediapro was awarded a package of all first and second division La Liga games for non-residential premises, paying €481 million. Mediapro has also renewed its international agreement for La Liga for a five-year period from 2019/20 to 2023/24. The rights sales company offered a guarantee of €4,485 million to La Liga.

In the current contract cycle, Mediapro owns the majority of rights to the first division, after outbidding Telefonica with an offer of €1.9 billion over the three seasons from 2016/17 to 2018/19 in December 2015. The telco, which operates under the Movistar brand in its home market, has the rights to one first division match a week.

Despite reports that none of the eight packages on offer reached its minimum requested price, La Liga said the proceeds from the rights already sold amounted to a 15% increase per season compared to the current deal. La Liga said the remining packages of rights – including one first division match a week and the Copa del Rey competition, would be awarded in the coming months.

Our analysis

The new deal for La Liga, despite the increase in value, is another sign that the market for pay TV sports rights in Europe is cooling off. La Liga is the fourth of the major European football leagues to agree a new rights deal so far this year; only the French league has been able to report a significant increase.

La Liga has been keen to increase its revenues from domestic rights, with the €1,140 million a season it will generate from the new deals with Telefonica and Mediapro comparing with €1,160 million for the German Bundesliga (2017-21), €973 million for Serie A in Italy (2018-21) and €1,566 million for the English Premier League (2016-19). 

It would seem fair to expect La Liga to be able to generate more money from rights. Spanish clubs have dominated European competitions in recent seasons, winning the Champions League for the last five years and the Europa League four times in the last five years. However, the dynamics of the Spanish pay TV market are not the same: a combination of its size, the average ARPUs, and competition between operators. IHS Markit TV Media Intelligence estimates there were 6.2 million pay TV subscribing households in Spain at the end of 2017, with ARPU across all operators of $20.41. While ARPU in Germany is slightly lower, there were 27 million pay TV subscribers at the end of 2017.  

In the current contract round, Mediapro formed a partnership with BeInSports to offer its matches on a premium pay channel which is carried by all pay TV operators in Spain, while Telefonica airs its one match a week on a channel branded as Movistar Partidazo. Operators have nevertheless complained about the difficulty of making a return on their investment in football rights and carriage payments, and senior executives from Telefonica even floated the possibility that they would not bid for la Liga rights at all, instead directing more investment into drama.

The new rights award suggests that Telefonica has been able to acquire rights for a more favourable price, with Mediapro apparently reluctant to challenge for another cycle. In a statement, the telco said the net cost of its La Liga rights will be 5% lower and added that ‘other operators will share in the savings’.

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