Going for goal: the live football TV battle

Next week’s auction for the rights to broadcast Premier League games could see bids hit £5bn. Nick Goodway reports on the corporate players

In with a shout: the auction includes rights to 168 Premier League matches, including – for the first time – Friday night games (Getty Images)

As Gavin Patterson, the chief executive of BT, reveals the telecoms giant’s third-quarter figures this morning, the elephant in the room will be the imminent auction of Premier League broadcasting rights for the next three seasons.

While Mr Patterson will highlight broadband growth, exciting plans for fibre networks, and perhaps even lower top-up costs for pensions and the benefits of taking over the mobile network EE, investors, analysts and rivals will be desperate to know BT’s plans for the auction. They won’t find out today.

Like Sky, the biggest broadcaster of football in the UK, and potential first-time bidders Discovery and beIN Sports of Qatar, BT is playing its cards close to its chest. The deadline for the sealed-envelope auction of seven different packages of live games and one package of highlights is a week today. The Premier League is talking about announcing the results in mid to late February.

But already speculation is surging that the next round of rights could go for far more than the £3bn Sky and BT paid between them last time. This round could hit £4bn, according to many analysts, and as much as £5bn at the extreme. This is a staggering amount given that, according to Enders Analysis, UK television companies splashed out 17 per cent of their total programme spending on live broadcasts last year – but attracted just 0.6 per cent of the total audience.

Obviously the Premier League does not mind suggestions that there may be other bidders, because that will help to inflate prices. Up for grabs in the Premier League auction of live rights are 168 matches, including – for the first time – Friday night games. No bidder can win more than five of the seven packages, or 126 matches.

Discovery, the channel that owns Eurosport, is a likely newcomer – even though Virgin Media, the other UK business of its chairman John Malone, is challenging the whole auction through the regulator Ofcom.

BeIN Sports, the Qatar-based global broadcaster formerly known as Al Jazeera Sport, is also reported to be looking at bidding. It already holds Premier League rights across much of the Middle East, where it can even broadcast matches that kick off at 3pm on Saturdays, which no British broadcaster can do. It has entered the French domestic market and is looking to expand in Europe.

For Sky, live Premier League football is still key to its success, however much it points to home-made dramas and Sky Atlantic as a successful diversification of channels that pulls in customers. It paid £2.3bn for football rights in the last auction.

BT’s £738m for a much smaller bundle of packages was a high-risk gamble, but one that has paid off for Mr Patterson. From a standing start, BT Sport now has well over 3 million subscribers, most of whom watch football as part of a BT broadband internet and TV bundle.

Just over a year ago, the company bid almost £1bn to secure the next three seasons of Uefa Champions League and Europa League games. That gave it rights to 350 matches, though they range widely in potential quality and potential audiences.

Some analysts argue that this means BT is not under so much pressure to bid for more Premier League rights; others, like Nomura, believe it might actually bid for about half of the total rights.

BT has said it will probably charge its broadband customers to watch Champions League games, but at a cheaper rate than its competitors. Mr Patterson recently argued that, together with its current package of Premier League rights, the company had “a very strong offer for customers” and so might not bid for more.

At the other end of the auction is the highlights package. Yesterday, the BBC announced that it had paid £204m for the rights to show Premier League highlights on Match of the Day for a further three years, until the end of the 2018-19 season. That represents a 13.5 per cent increase on the £179.7m that it paid at the last auction in 2012. However, for the first time, Match of the Day and all of its spin-offs will also be available on the BBC’s iPlayer catch-up service.

Despite speculation that ITV would mount a challenge for the highlights, the company is believed to have decided against it.

But the main focus will be on the auction for live games. Virgin, which alone carries both Sky and BT Sport channels, is challenging the auction even though it does not want to bid itself. It has successfully argued that the telecoms regulator Ofcom should examine why British viewers pay more to watch football than virtually any other footballing nation, and yet get to see only 41 per cent of Premier League games live, when many other nations show all of them.

Yet few industry insiders believe that will be enough for the auction to be put on hold. The bids will be bigger and better when they land on Premier League chief executive Richard Scudamore’s desk at the end of next week.

Bet in play: The likely bidders

Sky

The pay-TV broadcaster, which is 39 per cent owned by Rupert Murdoch, has sated armchair football fans’ desire for live sport since the Premier League was founded in 1992. It holds rights to the Premier League, Champions League, home nations internationals, the League Cup and the Football League. In the last Premier League auction, Sky bid £2.28bn over the three-year contract to show 116 matches a season.

BT Sport

Landed a heavy blow on Sky by snatching 38 Premier League games a season in 2012, including 18 first-pick matches, with a shock £738m bid. Has assembled a top team of pundits for its channel, including Paul Scholes, Rio Ferdinand and David James. The chief executive, Gavin Patterson, is a former director at the consumer goods giant Procter & Gamble and Telewest – the precursor of Virgin Media.

BeIN

Rebranded from Al Jazeera Sport last January, it has snapped up rights for games in Africa. The chairman, Nasser Ghanim al-Khelaifi, said the “new network will transform TVs into portals of unlimited immersive sporting action”. It broadcasts in France and the US and is owned and operated by Qatar Sports Investments. Subscribers have access to Fox Sports and NBA TV, as well as a host of European football leagues.

Discovery

A new potential bidder, it has the financial firepower to spend more than £1bn on the Premier League rights. Last year, it acquired a controlling stake in the Africa Cup of Nations broadcaster Eurosport. The owner of the Discovery factual channel has a market capitalisation of $28bn (£18.5bn) and the chief executive, David Zaslav, is looking for “must-have” content.