Sky, BT Seen Facing U.K. Soccer Rights Price Near $8 Billion

(Bloomberg) -- Sky Plc and BT Group Plc will need to shell out billions of pounds to keep broadcasting English soccer as competition from new entrants will help push rights prices to a record in an auction concluding next month, Ampere Analysis predicts.

The total price for the three-year domestic rights to the Premier League is set to reach 5.6 billion pounds ($7.8 billion) to 5.9 billion pounds, the media consultancy estimates. That represents an increase of as much as 15 percent from the 2015 auction, whose approximate value Ampere correctly predicted at the time.

Sky is likely to take four or five of the seven packages, with BT taking two or three and another bidder -- most likely Amazon.com Inc. or Liberty Global Plc -- taking one or two, Ampere’s Guy Bisson said. The Premier League is increasing the number of live games available as it seeks to attract a wider pool of bidders.

Ampere built a model to forecast the likely value of rights before the previous round. This time the model is predicting a value in excess of 7 billion pounds, but Ampere says that estimate is too high because of pressure on the companies’ profit margins and a lessening of competition between BT and Sky because of a channel-sharing deal.

When taking into account the deals beyond the U.K., the total the Premier League is set to get for its broadcast rights for the three seasons starting in 2019 will be about 10.9 billion pounds, Ampere estimates. The international deals yet to be awarded are also set to increase in value, Ampere said.

Underscoring the Premier League’s global appeal, financial-services company Deloitte on Tuesday released a study showing a record 10 English teams among the world’s 20 biggest by revenue. Southampton joined the Top 20 group, dubbed the Money League, for the first time at 18th and AC Milan, one of the world’s giant clubs historically, fell out for the first time since the table began 21 years ago.

“The Deloitte Football Money League has a particularly English feel this year, with the new broadcast deal and UEFA competition performance driving broadcast revenue growth,” said Tim Bridge, a senior manager at the company’s Sports Business Group. Next month’s rights auction “will be crucial to determining the long term composition of the Money League.”

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