Sunday 11 December 2016

Sky must share screening rights in €4.6bn German football auction

Stefan Nicola

Published 10/06/2016 | 02:30

Bundesliga giants Bayern Munich, winner of this year’s league
Bundesliga giants Bayern Munich, winner of this year’s league

Sky has to share the rights to live German football with Discovery Communications, but will broadcast the vast majority of the games after the league raised €4.64bn in the country's biggest such auction to date.

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Sky won the rights to show the Bundesliga matches on Saturday and Sunday - the most important days - across its TV channels and the web, and will broadcast 572 live games from the summer of 2017 until mid-2021, according to a statement yesterday. Sky rose as much as 4.3pc in London.

Discovery's Eurosport channel won the Friday evening game after the Bundesliga introduced a so-called no-single-buyer rule, meaning Sky wasn't allowed to retain all live-match rights.

While Sky lost some games and saw costs increase "significantly", it avoided having to compete against major phone companies including Deutsche Telekom, which opted not to bid aggressively, said Erhan Gurses, an analyst with Bloomberg Intelligence.

The no-single-buyer rule, demanded by the country's telecoms regulator, doesn't necessarily mean consumers will have to sign up for more than one pay-TV product, as companies can sell each other sub-licenses.

Sky filed a complaint against the rule at a court in Dusseldorf, saying it wasn't necessary under antitrust laws. Sky says it still won rights to show 93pc of the games live - remaining the dominant pay-TV provider for German football. Its shares were up 2.9pc at 955 pence as of 4:18pm in London yesterday.

The auction proceeds of €4.64bn, or about €1.16bn a season, for domestic rights make it the biggest ever in the country, where Sky has relied on Germans' passion for teams such as Bayern Munich and Borussia Dortmund to become the dominant pay-TV provider.

Sky said it'll pay an average of €876m a year for the rights, up from €486m a year under its existing contract.

Amazon.com emerged as an entrant buying Bundesliga exposure by winning the audio rights in Germany for web and mobile distribution. It's the first time it acquired rights to a major football league, Bundesliga said.

Perform Group, the company backed by billionaire Len Blavatnik that runs sports websites including Spox.com, won the rights to show Bundesliga highlight clips online, a package currently held by Axel Springer. Perform previously snatched from Sky the contract to show the Premier League in Germany.

Sky's hold on German football dates back to the early 1990s, when its predecessor, Premiere, showed the first games live. The last time it lost the rights was in 2005, when cable operator Unitymedia beat Premiere, causing the company's shares to collapse as much as 43pc in one day. In the last auction, the rights sold for about €660m a season. (Bloomberg)

Irish Independent

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