(Bloomberg) -- Telefonica SA outbid its main rival Mediapro for the bulk of broadcast rights to Spain’s top soccer league, paying 2.9 billion euros ($3.4 billion) for three seasons.
The deal agreed late Monday gives Telefonica direct control over La Liga matches starting in 2019, putting an end to a wholesale arrangement with Mediapro. The total auction proceeds of 3.4 billion euros compare with a combined 2.95 billion euros that Mediapro, Telefonica and others offered for the prior three years.
It’s a surprise win for Telefonica, which had indicated it would bid cautiously while focusing on reducing debt. Telefonica agreed to pay 980 million euros per season, slightly less than its previous three-year deal, the Madrid-based carrier said in a regulatory filing. That gives the company two packages of rights to nine live games per match day.
For Telefonica, the deal “removes significant uncertainty” and gives the company more control over how it broadcasts matches and has the opportunity to boost advertising revenue through its Movistar TV channels, Berenberg analysts Nicolas Didio and Usman Ghazi said in a note to clients.
Telefonica rose 1.3 percent to 7.45 euros at 9:50 a.m. in Madrid.
“Telefonica has always defended that the LFP matches are a very attractive content, but that its acquisition had to be carried out at the appropriate price," the company said in the filing.
Mediapro was awarded rights to highlights and to broadcasting for public spaces such as bars and restaurants. After the prior auction in 2015, Mediapro, which doesn’t have a major broadcasting platform of its own, promptly resold its rights to Telefonica, Orange SA and Vodafone Group Plc.
The Spain auction contributes to a mixed picture for the value of soccer rights in Europe. While recent auctions in England and Italy have dipped in value, the sport has benefited from steep inflation over the past decade as telecom carriers began competing with broadcasters for content that could help them retain broadband subscribers. New interest from web giants including Amazon.com Inc. has raised some expectations that rights values will keep rising.
Barcelona-based Mediapro has dominated global broadcasting rights for Spain’s top soccer matches and the rights in Spain for the Champions League, Europe’s top club competition. In May, Mediapro beat other bids for televising French matches. The TV producer was also a major force in Italian auctions this spring, helping drive up prices before losing to Sky Plc.
La Liga managed to raise 15 percent more from Monday’s auction, even with only four of the eight packages on sale awarded. Rights to Spain’s Copa del Rey -- the country’s oldest soccer competition -- weren’t included.
League President Javier Tebas wants to shrink the financial gap between the Spanish tournament and England’s Premier League, the world’s wealthiest, by capitalizing on a strong brand, thanks to stars Cristiano Ronaldo and Lionel Messi.
Teams from La Liga -- including Real Madrid, Barcelona and Atletico Madrid -- have been frequent recent finalists in the Champions League. Tebas has said that he expects the Spanish and English leagues to be practically equal within 10 years.
©2018 Bloomberg L.P.