Assessing the significance of Amazon's entry into the Premier League broadcasting market
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BROADCASTING
image: dozet / iStock / Getty Images Plus / Getty Images
Simon Leaf Managing Associate
simon.leaf@mishcon.com
Mishcon de Reya LLP, London
Assessing the significance
of Amazon’s entry into
the Premier League
broadcasting market
The Premier League recently announced that one of the final two domestic broadcasting packages
for the live streaming of Premier League football had been sold to Amazon Prime for an undisclosed
amount. For three years from season 2019/20, all ten matches of the traditional Boxing Day fixture
programme and a further ten mid-week matches from another Bank Holiday game week will be
available in the UK only to Amazon Prime subscribers. The other streaming package was taken by
BT. Simon Leaf, Managing Associate at Mishcon de Reya LLP, discusses the significance of Amazon’s
entry into the Premier League broadcasting market and the impact that it is likely to have on rights
holders, other technology and streaming platform providers, and traditional broadcasters.
The final two packages were sold several League’s decision to create these two more likely to consume sports in non-
months after the initial auction had been smaller streaming packages compared traditional ways, borne out by a recent
concluded, as the Premier League failed to the other standard packages of decline in viewing figures of live Premier
to receive a bid that met its reserve price live rights it has historically sold. The League matches experienced by the
earlier in the year. On the face of it, this change in direction was made in the traditional broadcasters. For the Premier
suggests that we are a long way off from hope that it would lead to a bidding League season 2016/17, for example,
seeing a revolution in how sports rights war between the global technology viewing figures for matches on both
are consumed. However, digging a little platforms, commonly now referred Sky and BT fell; culminating ultimately
deeper suggests this could well be to as the ‘FAANGs’ (standing for in Sky agreeing to pay around 16%
evidence of a major change in approach Facebook, Apple, Amazon, Netflix and less per match from 2022 than it does
to the sale of broadcasting rights. Google), who were all rumoured at under the current deal. This includes
some stage to be considering entering partnering exclusively with non-linear
A change in strategy for rights holders the market for the broadcasting of platforms in recent months. In what was
In recent years, rights holders have live Premier League football. reported to be boxing’s first ever US
been increasingly looking at alternative, $1 billion deal, Matchroom Boxing, for
non-linear, routes to market when Other prominent sports rights holders example, announced in May 2018 that it
selling their valuable broadcasting have deliberately looked at innovative was partnering with the DAZN streaming
rights. This is evidenced by the Premier ways to engage younger fans that are service in the US. As part of the deal, 16
A Cecile Park Media Publication | July 2018 9
BROADCASTING
continued
boxing events a year will be held in the be directly attributed to the relevant which persuaded Amazon to dip its toe
US and will be exclusively available to event, which makes comprehensive into the water. While the amount paid
view in the US on the DAZN platform. pricing and auditing provisions a must. has not yet been revealed, fans of each
Premier League team will be forced
Every Premier League game is available Can Amazon make it work? to interact with Amazon if they want
in the US via NBC’s online portal, and all On almost every commercial measure - to view these games, and it therefore
FIFA World Cup 2018 matches in Australia including number of viewers, cumulative gives the company a great opportunity
(including 39 of them on an exclusive attendances and sponsorship/ to cross-sell its other services, including
basis) were originally due to be streamed broadcasting deals - the Premier content available through Amazon Prime
by Optus, a major Australian broadband League is the most successful league and its more traditional e-commerce
supplier. However, Optus experienced in Europe, and arguably the world. platform. This will provide Amazon with
significant technical issues in making Through its own popular online platform the opportunity to better understand
the stream available to the Australian (including its Fantasy Football offering, its subscribers’ tastes, and then further
public, and ultimately agreed to ensure as well as the individual websites run tailor the offering to suit them. Given
that all of its matches would also be by each of the clubs), the Premier that the next auction is unlikely to
shown on Australia’s public service League and its clubs have amassed commence until at least a season into the
broadcaster too. This was clearly an a wealth of data about its fanbase. new partnership, it also gives Amazon
embarrassing turn of events that further (and its rivals) the opportunity to assess
illustrates the risks of the new approach The FAANGs also operate on a global whether to make a more comprehensive
of relying solely on non-linear means. basis and exploitation of data is a core bid for the next set of rights from 2022.
component of all of their strategies.
One of the main ways that rights holders Recently, they have started to become Nevertheless, both rights holders and
have sought to mitigate this risk is by more acquisitive in terms of the purchase the technology companies will need to
focussing their efforts on bringing the of sports distribution rights. Examples ensure that any processing of personal
FAANGs on board in the expectation include Facebook’s partnership with data - which would include sharing
that they have the necessary resources Fox Sports to stream UEFA Champions access to each other’s database for
to ensure that a perfect ultra HD stream League football and Major League marketing purposes - complies with
is available for their users. Such efforts Baseball games in the US, and Amazon’s the new General Data Protection
will no doubt be enhanced with the purchase of the UK rights to screen the Regulation (Regulation (EU) 2016/679),
launch of 5G services in the future. US Open tennis and the ATP World Tour. as well as the Privacy and Electronic
Google, through its YouTube platform, Communications Regulations 2003.
From a legal perspective, rights holders has also completed deals to screen
will need to be careful when drafting sporting events, particularly eSports The impact on traditional broadcasters
broadcasting agreements involving - an example being the multi-year The Premier League’s deal with Amazon
streaming services. Not only will they broadcasting deal it signed with Faceit to is also significant because it now means
need to ensure that they have not already stream the Esports Championship Series that, for the first time in the League’s
granted these rights to existing media pro gaming league. It is therefore not history, there will be three domestic
partners, they also need to consider how surprising that Facebook, Google and broadcasters screening live games. The
to protect international broadcasting Twitter had reportedly been considering success that Sky has had in consistently
revenues if the relevant partner is only making a bid in the latest rights auction. growing its subscriber base since the
being granted rights in certain territories early 1990s has often been attributed to
- especially given the potential piracy Perhaps it was the attraction of the its exploitation of Premier League rights.
risks. Savvy rights holders will also potential access to millions of fans during On a number of occasions it has seen off
seek a share of increases in subscriber the Boxing Day fixtures, traditionally rival broadcasters, such as ESPN, Setanta
and sponsorship revenues that can one of the busiest times for retailers, and NTL, which sought to grow their
10 WORLD SPORTS ADVOCATE
image: Jakob Owens / Unsplash.com
In a climate where on-demand availability
is increasingly the expectation in all forms
of life, viewing live sport is one of the few
remaining activities where the bulk of the
value remains in the live action itself.
operations through the acquisition of the April 2018. For under $5 per month (so, of live sports content, over six times
rights to broadcast live Premier League significantly cheaper than ESPN’s main as many people still watched the
games. However, arguably the fiercest service that so much of its profits are game through traditional methods.
competition it has faced has come in dependent on), ESPN+ promises to show
the last five years from BT, with both more than 10,000 live sporting events In a climate where on-demand availability
companies competing to offer customers to its subscribers, including a live Major is increasingly the expectation in all
the full suite of TV, mobile, telecom and League Baseball game every day during forms of life, viewing live sport is one
broadband services. Nevertheless, it the season. Away from sport, Disney of the few remaining activities where
remains to be seen whether ordinary has also removed its films from Netflix, the bulk of the value remains in the live
fans will be willing to pay a third provider, and has announced plans to develop its action itself. After all, it is increasingly
and how pubs and clubs that rely on own internet-only streaming service. It hard not to find out how your team, or
Premier League football to ensure remains to be seen what impact Disney’s the athlete that you are supporting,
footfall will be impacted by the move. acquisition of 21st Century Fox-owned has done in an ever-connected world.
Sky Sports will have on the market if It is also one of the few activities
Above all, Amazon’s entry is a sign of the deal eventually goes through. which brings people together, so that
the competitive challenges that both arguably the experience is enhanced
Sky and BT face across their wider The BBC, on the other hand, has been by feeling of being part of a community
businesses from the growth of each trialling the use of alternative delivery while watching the relevant event.
of the FAANGs. Looking at this from methods during this year’s FIFA World
a narrow rights perspective, some of Cup. All 33 of the games that the BBC Of course, social media companies
the other events that companies like has the rights to show are not only would argue that this is exactly
Amazon, Facebook and YouTube have available through its iPlayer service, but the advantage that they have over
already won are examples of this. At also in virtual reality through a specially the traditional broadcasters, and it
a broader level, traditional pay TV built app. Over three million people explains why the major clubs and
broadcasters are increasingly needing streamed England’s first group match leagues have invested so heavily in
to reassess their business models in against Tunisia using the iPlayer in the building content and communities
order to retain their relevance, when UK, a new record. Again, there are plenty specifically for the likes of Facebook,
not only is so much of their customers’ of legal considerations for broadcasters Snapchat, Instagram and Twitter.
data that they seek to understand and to consider when developing new
exploit increasingly held by the FAANGs, technologies. In particular, they will The main headline from the Premier
but also globally, there is evidence of a need to ensure that they have the League’s latest auction was undoubtedly
growing trend of subscribers who are appropriate rights under their existing the drop in domestic revenue generated
‘cord-cutting.’ In other words, consumers agreements to broadcast through the from the sale of UK broadcasting rights.
are dropping pay TV packages in favour new medium. Ownership of the IP However, the next auction could see a
of cheaper streaming alternatives, associated with the new platform, as return to growth. Especially if Amazon
such as Amazon Prime and Netflix. well as any additional content generated is successful in exploiting the rights that
by users of the service, should also it has acquired, other potential non-
Other broadcasters, like the BBC and be considered from an early stage. linear broadcasters may enter the ring to
Disney-owned ESPN, have sought to compete for the rights. In response, the
compete with the likes of Netflix and The future Premier League may look to increase the
Amazon Prime by coming up with their While the BBC’s latest viewing figures number of potential broadcasters vying
own alternative delivery methods. ESPN from the England versus Tunisia for the rights or possibly re-examine its
launched ESPN+, a sports streaming match certainly adds to the evidence global model of rights distribution so that
service designed to complement the that there appears to be something a company can compete to obtain global
traditional ESPN channel, in the US in of a revolution in the consumption (rather than just UK) streaming rights.
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