Sky’s share price rose almost 4% after the broadcaster paid €3.5bn (£2.74bn) to secure the lion’s share of TV rights to German Bundesliga football matches, despite paying 80% more than the last deal.
Sky is paying €876m per year in the four-year deal with the German Professional Football Association (DFL), up from €486m under its existing deal, and has been forced to give up some of the rights to rival Eurosport.
Nevertheless, investors were buoyed by the positive news that Sky maintained its iron grip on matches. It will air 93% of all live games, as well as adding all Bundesliga 2 games for the first time, and digital rights.
“This is an important step to building our business in Germany and maximising the significant opportunity for growth,” said Jeremy Darroch, chief executive of Sky.
Following a regulatory ruling, the Bundesliga rights had to be split between at least two broadcasters, with Discovery-owned Eurosport emerging as the victor for Friday night matches.
The DFL said that it made a record €4.64bn in total from Sky and Eurosport in the rights auction.
“The result of the tender is an important step in light of the future viability of top-level German football,” said Christian Seifert, chief executive of DFL. “The Bundesliga now has established the best foundation for belonging to the three strongest football leagues in the world in terms of revenues and will accordingly be able to present top-level sports at the highest level.”
As far as rivals go, Sky will be pleased that Discovery emerged the victor as it has a deep relationship with Discovery – including distribution on its services across Europe and ad-sales representation – and not perhaps a Vodafone or other lesser-known quantity.
Eurosport will air 40 live matches from the top-flight Bundesliga per year, regularly on Friday nights as well as selected Sunday afternoon and Monday nights, while Sky will exclusively air 266.
“When you consider our goal is to secure more must-have and highly relevant sport content, Bundesliga rights within Germany and the Olympic Games [rights] across the continent are at the very top of the pyramid,” said Peter Hutton, chief executive of Eurosport.
Analysts also noted that the introduction of a major rival for top-flight rights in the UK, in the form of BT which has taken a slug of Premier League and all Champion’s League rights off Sky, has failed to have a material impact on Sky’s profitability of subscriber numbers.
“Our conclusion is that the landscape is, remarkably perhaps, broadly unchanged,” said Tom Singlehurst, an analyst at Citi. “It is also noteworthy that none of the ‘big beasts’
pay-TV business.
