What's going on here?
England’s Premier League had a disappointing season, failing on Wednesday to score as much cash for the broadcasting rights to its soccer games as it did last time around. That may be a sign that the effects of “cutting the cord” are hitting even the beautiful game.
What does this mean?
UK pay-TV providers BT and Sky bid £4.4 billion between them for the rights to screen the vast majority of top-flight English games from 2019 to 2022. That’s a lot – but it’s down on the £5.1 billion the Premier League got in 2015 for essentially the same rights.
The culprit? As more and more people desert cable for online streaming services, those companies aren’t keen on having to spike cable prices again – potentially spooking precious customers – in order to be able to afford soccer rights.
Why should I care?
For markets: Shares of Sky jumped 2% on the news.
Of the two cable providers, Sky was the real winner, effectively paying less to screen more Premier League matches. Now, shares of Sky are sitting above the price at which Rupert Murdoch offered to buy the company in 2016 – and if that deal (in some form) is greenlit by regulators, it seems that he (or potentially Disney) will have to spend more to buy out Sky.
The bigger picture: The sports industry may in for a rude awakening.
After consecutive decades of ever-increasing television fees and, relatedly, a huge boost to player salaries and the value of franchises, the sports industry may be heading into a period of readjustment. The NFL, America’s most popular sport, is suffering from a declining viewership, and now the Premier League is getting paid less for televised games in its home country. YouTube – Netflix – even the rise of eSports: whatever the reason, the appeal of hours-long live sport appears to be waning.