Cash-rich pay-TV service Al Jazeera Sports could force Sky Sports to bid 25 percent more for 2013-16 Premier League rights when negotiations begin next summer, an analyst says.
Al Jazeera Sports has picked up international La Ligue rights (€90 million per year), most Champions League rights in France (€60 million per year) and has reportedly trumped a joint TF1-M6 bid for French rights to Euro 2012 with a €130 million offer.
“We would expect (Sky Sports) to spend +15-25% more than in the previous round of negotiation in 2009,” says investment analysis firm Bernstein. “We envision a scenario in which BSkyB (NYSE: BSY) retains all but one packages for the next 3-year block but faces competition (for all six packages available) by at least two other entities, ESPN (NYSE: DIS) and Al Jazeera.”
That could raise Sky’s payment to up to £675 million per season. A 25 percent price hike is consistent with increases Sky Sports has made in the last two bidding rounds, however.
Any entrance by Al Jazeera Sports to the UK could hurt ESPN, which currently holds a minority of Premiership rights beside Sky Sports’ majority, more than Sky Sports, in Bernstein’s scenario.
“As European regulators are turning increasingly hostile to exclusive contracts, it may prove impossible for pay TV companies to keep key premium content away from Apple.”
Few people currently consider Apple (NSDQ: AAPL) has ambitions to own premium content, even though it has proved masterful as a distributor and retailer of content owned by other entities.