Sunday marks a unique day in the Premier League schedule, it will be a rare day in which all matches will happen at the same time – it’s also the final matchday of the season.
The matches are being broadcast on Sunday at 4:30pm, rather than the more traditional Saturday 3:00pm, because that’s illegal (for now).
Calls for a shake-up of the football bylaws and more significantly the way in which broadcast rights are distributed continue to circulate with increasing frequency.
Everyone is looking to streaming as the obvious next iteration.
It remains to be seen whether the league cuts a deal with one of the Silicon Valley streamers like Amazon, Disney, Apple or even Netflix.
Or whether, it takes a more direct-to-consumer approach with its own standalone service.
Either way, it seems the writing may soon be on the wall for traditional pay-TV broadcasters like Sky.
Streaming = yet more money for clubs
Whatever form it takes, the simple maths is quite clear.
Through a centralised global streaming service the Premier League (which is effectively owned by the clubs that participate in the competition) can blow what is already big sports business into the stratosphere.
Selling monthly subscriptions to Premier League football fans around the world, perhaps via a ‘digital season ticket’ and/or a ‘league pass’ promises to be seriously lucrative, compared selling rights wholesale to intermediate pay-TV broadcasters.
It makes particular sense for the ‘top clubs’ which already are well established global brands, as they’d be able to tap into fanbases they’ve been developing for many years.
Clearly such a system would balloon the profits of clubs like Manchester United, Liverpool, Arsenal, Chelsea, Manchester City and (maybe even) Spurs.
How much do clubs make now?
The current structure sees the Premier League bringing in around £10bn of TV rights fees over a three-year block, which began with in 2022 (i.e. this current season).
Domestic broadcasters agreed to pay £5.1bn to cater to the British audience while for the first-time global rights are set to eclipse the ‘home’ market, coming in at around £5.3bn for the 2022 to 2025 rights cycle.
At club level, the Premier League dishes the loot through a mix of fixed payments (50% of the pot is shared evenly between all 20 clubs), then another 25% is shared out based on the number of games each club had broadcast in the season, and, the remaining 25% is based on the clubs final league position.
So, after Sunday’s matches are over, this season’s Premier League champions Manchester City will bank over £200 million from this year’s TV rights (up from £153mln under the prior terms).
Bottom of the league, and Championship-bound, Southampton meanwhile will take close to £120mln as the club drops through the relegation trapdoor.
These figures represent a huge premium to years gone by: starting with the inaugural 1992/93 Premier League season clubs shared £304mln for five seasons of domestic rights, and, by 2007/08 the pot reached £1.7bn for four year.
The deal starting 2013/14 burst above £3bn for three seasons, followed by a £5.1bn a year deal beginning in 2016/17.
The rise comes in parallel to the clamour for content in “the digital entertainment world”.
Many hours of premium content
A major sports organisation like the Premier League generates hundreds of hours of “audience engagement” every year.
Movies and TV shows are great, and compelling, and have driven the growth of countless media organisations. But, nothing generates organic content and subscription numbers quite like live sports.
Indeed, the very launch of the Premier League (a breakaway from the English Football League in the 1992) was inextricably tied to Rupert Murdoch’s Sky satellite TV network, itself launched in 1990.
The Sky Sports channels and the ‘exclusive rights’ to broadcast the Premier League was and continues to be the primary source of subscriber retention for the pay-TV company.
What could football streaming be worth?
Well, by way of case study, Netflix spent around US$16.7bn to make some 3,531 hours of original content in 2022.
Netflix is able (arguably only barely) to make that kind of expenditure work because it has a global subscriber base of around 200mln paying users, each coughing up between $5 and $20 per month depending on account type and the user’s location.
The streaming platform meanwhile generated some US$31.6bn of revenue in 2022 and, in New York, Netflix shares value the company at US$160bn.
Premier League = content factory
Now consider football, Premier League matches alone span close to 570 hours of aggregate footage each season (closer to 800 hours if you count half time).
Now, that’s before any manager can stare down a post-match interviewer, proclaim themselves a special one in a press conference or meltdown to tell us, honestly, that they would ‘love it if we beat them’.
Nor would those 570 hours include time for any utterance of punditry from the likes of Gary Neville, Roy Keane, Gary Lineker, Carragher, Redknapp, Richards, McManaman or Savage.
It doesn’t include a single minute of yellow-tie wearing reporters bringing us transfer news or rumour in drizzly September car parks in Cheshire.
And it certainly doesn’t include a second of time for a Z-list actor or celebrity to kick a ball at a crossbar on any given Saturday morning.
Having thoroughly laboured what is a not-at-all-complex point, it is easy to grasp the sales pitch here.
Driving investment into clubs
Moreover, it probably only takes a second to see why the protracted haggling in the possible takeover of Manchester United is oscillating between £5 and £6 billion.
Or why a group of American investors handed over some £3.2bn last year to acquire Chelsea.
Without needing to factor in a breakaway European Super League (a separate cash-grab which many experts expect will inevitably re-emerge at some point) a switch to a streaming quickly makes sense of otherwise astronomical valuations for these Premier League clubs.
Fairly basic maths jotted on the back of an envelope shows there much more upside to be captured if the league takes control of its own content.
This likely also underlines why hedge fund managers like Elliot are lurking to provide capital to club owners.
Streaming can be fan-friendly
For the football fan, the proposition is a no-brainer too - "hey, do you want to watch all your clubs games, even those happening at 3:00pm on a Saturday, pay less?"
Across the pond, Disney is this week reported to be preparing a standalone ESPN app which would charge subscribers a rumoured US$22 per month for its live and archived (the existing ESPN+ app shows separate content and doesn’t include what’s on the TV channels).
In the UK especially, football fans are loyal to a fault. Even amidst the cost of living crisis, most retain bloated Sky TV / Sky Sport / BT Sport bundles - altogether costing over £100 per month – so that they can watch the games.
It’s a compelling proposition.
And that’s before we consider that the Premier League clubs retain rights to footage of past seasons, former glories and countless opportunities for documentaries and biopics.
In the meantime, though, the current pay-TV package has two more seasons to run.
After this weekend, the dreary football-less days of summer loom … (you can watch county cricket, streaming online for free though!).