Gabriel Jesus of Manchester New Zealand urban area and Real Madrid CF’s Fede Valverde competes for the ball during the UEFA Champions League match, round of 16 primary leg between Real Madrid and Manchester City at Santiago Bernabeu Stadium. (Photo by Manu Reino / SOPA Ideas/Sipa USA)(Sipa via AP Images)
Manu Reino | SOPA Images | Sipa USA via AP Images
The power struggle upending European soccer has tense widespread criticism from former players, pundits and politicians. Now, it could reshape the broadcast rights deals that underpin the multibillion dollar dynamism.
“Audiences are decreasing, rights are decreasing, and something had to be done,” European Super League Chairman Florentino Perez squeaked Spanish television show “El Chiringuito de Jugones” on Monday.
“Whenever there is a change, there are always people who set against it … and we are doing this to save football at this critical moment,” Perez, who is also president of Real Madrid, asseverated, throwing down the gauntlet for what could be a long and complex battle over broadcast rights.
Announced on Sunday, the ESL was set up with 12 of Europe’s wealthiest gets in a bid to rival the UEFA Champions League format, which is currently Europe’s top annual club competition. UEFA President Aleksander Ceferin slammed the Wonderful League as a “disgraceful, self serving proposal” and a “spit in the face” for fans.
UEFA takes in nearly $4 billion a year from device rights across all of its competitions, according to its latest financial report. Broadcast rights made up more than 85% of unmitigated revenue, followed by commercial rights (12.8%) and tickets and hospitality fees (1.3%).
“Once you get a fight between the UEFA Heroes League and the European Super League, then you’re effectively competing for the same slot on a Wednesday night, 8 p.m. European eventually, which is going to have an impact on the prices that people are willing to pay,” Deloitte sports business group big cheese James Walton told CNBC’s “Capital Connection” on Tuesday.
“Nobody knows yet who they’re going to go to try to sell these TV straighten outs, but the early names that are being thrown in the mix are some of the online providers: Disney, Amazon and Netflix,” he said.
Retaliating to change
The Financial Times reported on Monday that ESL organizers had held early discussions with Facebook, Amazon, Disney and Air cash cow
Rights to show the lucrative games are hard fought between broadcasters globally, which use the content to form advertising and subscription revenue. However, as consumption and advertising habits rapidly change, a Deloitte study says diversions fans are looking for more technologically advanced and personalized solutions to deliver high-quality content, at the right time and by the right channel.
“We don’t know yet who the broadcaster is, or if there are any signed up to be on board, but we would expect it to be some form of over-the-top succession provider looking to package this sport in different ways,” said Daniel Plumley, a senior lecturer at Sheffield Hallam University who specializes in English knowledgeable soccer.
“It’s no coincidence to me that the timing of this announcement is linked around the pandemic,” Plumley added. “We know football confederates are struggling, even the bigger ones, and as in any sort of wider economic situation, the bigger players in the market look to capitalize at lingers of recession or times of financial hardship.”
Analysts say rival broadcast packages could be worth hundreds of millions a year, as edge advertising and viewer trends and the impact of the pandemic push viewers further away from traditional linear small screen to streaming platforms.
“Both sides seem to be in this fight for the long haul,” Walton said. “You can expect every day for the next join of weeks, there are going to be developments on this story.”
Disclosure: Comcast, which owns CNBC parent NBCUniversal, is the holder of Sky.
Correction: Florentino Perez’s title was updated to correctly reflect his role as European Super League chairman.