If the world\u2019s biggest technology companies are going to become major global players in the world of sports, the English Premier League will provide a clear sign.<\/p>\n
The world\u2019s top soccer league is about to negotiate new rights to broadcast its matches in the UK.<\/p>\n
Owners are hoping companies such as Facebook and Amazon.com will bid and push the price past the current 5.1 billion-pound ($6.9 billion) three-year deal.<\/p>\n
Martin Sorrell, head of WPP, the world\u2019s biggest advertising company, said on Wednesday that he expects the tech companies to enter the fray.<\/p>\n
The opinion is shared by Manchester United Vice Chairman Ed Woodward. “Absolutely I think they\u2019ll enter the mix,” he said last month.<\/p>\n
The tech giants are showing increased interest in sports to help draw viewers to their online video services. Broadcasting games is one of the most reliable ways to quickly build an audience.<\/p>\n
But the rights don\u2019t come cheap, and the technology companies haven\u2019t yet shown an appetite for competing with global media companies whose businesses depend on maintaining the sports rights.<\/p>\n
The National Basketball Association, for example, sold rights\u00a0through the 2024-2025 season for $24 billion, while the National Football League makes more than $5 billion in rights fees every season.<\/p>\n
Small Steps<\/strong><\/p>\n Thus far, the technology companies have taken smaller steps, such as Facebook\u2019s deal to carry 20 Major League Baseball games and show highlights from NFL games.<\/p>\n Amazon struck an agreement giving its Prime members access to 10 NFL games on Thursday nights and ATP tennis matches.<\/p>\n \u201cWe know live sports attracts a passionate fan base, many of whom are Prime members,” Greg Hart, vice president of Amazon Video, said\u00a0after signing the recent tennis deal.<\/p>\n Facebook\u00a0offered $600 million for the digital rights to cricket matches in India, but ultimately was outbid. The social-media company is interested in live rights, but is still working out its approach, according to Dan Reed, head of sports.<\/p>\n It hasn\u2019t committed to bidding on Premier League matches next year, he said at a roundtable interview Wednesday.<\/p>\n \u201cIt is premature to speculate how we might approach that,\u201d Reed said. The company is trying to balance partnering with media companies that post material to Facebook, with competing against the broadcasters in bids for sports licenses.<\/p>\n \u201cIt\u2019s still very early days,\u201d he said. \u201cThere is no template.\u201d<\/p>\n Bidders Stretched<\/strong><\/p>\n Without new bidders from Silicon Valley, the Premier League and its 20 clubs might have a harder time matching the expiring domestic rights deal.<\/p>\n In the latest round, BT Group and Sky orked over a combined 1.7 billion pounds a year, up from 1.1 billion pounds, for live broadcast rights.<\/p>\n The league sells its overseas rights, which are the most highly coveted in Europe, in separate packages.<\/p>\n The rising cost of the sports has already hurt media companies\u2019 bottom lines. For Sky, the increased costs of Premier League games contributed to a 6.2% drop in operating profit in the year ended in June.<\/p>\n BT, which has been using its sports channels to encourage customers to hang on to its broadband packages, has been hit financially by an accounting fraud in Italy and is grappling with a large deficit in its pension fund.<\/p>\n As technology companies show more interest in sports, the Premier League is mulling new ways to package its content. At a meeting on Wednesday, the league\u2019s owners discussed issues relating to sharing income from overseas rights. The clubs \u201cunanimously agreed to adjourn the meeting to allow further discussion,\u201d according to an emailed statement from the league.<\/p>\n Media Squeeze<\/strong><\/p>\n Currently, Sky screens 126 matches in five slots, costing an average of about 11 million pounds per match. BT carries the other Premier League games, and also has the rights to Europe\u2019s elite soccer tournament, the Champions League.<\/p>\n The arrival of digital businesses could have far-reaching implications for media companies.<\/p>\n Sky built its business on the back of Premier League football, attracting a core audience of 4 million to 5 million households who mainly subscribed to Sky for sports.<\/p>\n In recent years, influenced by the loss of Champions League to BT in 2013, the UK-based satellite broadcaster has expanded its original programming and has attempted to broaden its appeal to the whole family rather than just sports enthusiasts.<\/p>\n Speaking at a sports conference in London on Wednesday, Sorrell said traditional broadcasters will have to be innovative regarding their content development and social media presence as they seek to hold onto critical sports rights that will continue to become more expensive as digital companies such as Alibaba Group Holding, Tencent Holdings, Alphabet Inc\u2019s Google, Facebook and Amazon jump in.<\/p>\n \u201cYou\u2019re seeing an explosion,\u201d in prices, with live events becoming even more prized, Sorrell said. \u201cDemand is going to exceed supply.\u201d<\/p>\n
\n