Looking for a recession-proof biz? European soccer is your best bet
Even in tough times, with economies in crisis and politicians squabbling over the euro, soccer leagues have been scoring in the latest rounds of television broadcast deals.business Updated: Jan 01, 1900 00:00 IST
Even in tough times, with economies in crisis and politicians squabbling over the euro, soccer leagues have been scoring in the latest rounds of television broadcast deals. The English Premier League sold three years of domestic TV rights this month, covering 2013 through 2016, for the impressive sum of £3 billion, or about $4.7 billion. That was 70% more than the current three-year deals. Only a few weeks earlier, the German Bundesliga announced a four-year agreement that will lift its take to nearly $3.2 billion, a 52% increase. "This is the jewel in the crown of televised sport," said Tim Westcott, senior analyst at Screen Digest in London. "There is a market for those rights, and anytime that they come up for sale, it seems that there are people who are willing to pay more for them." As with much else in Europe these days, there is a north-south divide in the economics of soccer. Among the big five soccer markets of Europe, leagues in the northern countries of England and Germany have struck more lucrative deals than their counterparts in France, Italy and Spain, where the results have been more uneven. In Italy, the latest round of negotiations has not been completed, though the main television packages have resulted in small increases from the previous deals. In France, overall revenue from television rights is set to fall slightly, beginning next season. In Spain, meanwhile, there is considerable uncertainty, with no TV deals in place even for the coming season. Over all, the resilience of the market has surprised analysts, some of whom had expected flat or falling revenue from television. There are several reasons for the spending spree. One is the structure of the television business in Europe, where the vast majority of professional soccer matches are shown on pay television. While most high-profile sports in the US remain on free, advertising-supported TV, national markets in Europe are too small to generate sufficient ad revenue to finance multibillion-dollar rights deals. While TV advertising has slumped during the crisis, pay-TV channels have relied largely on subscriber fees, not advertising, for revenue. And subscribers have mostly remained loyal, especially in Britain, where British Sky Broadcasting, the main pay-TV company, has more than 10 million customers. "From the standpoint of a lot of media companies, it's a very seductive product to broadcast," said Simon Chadwick, professor of sport business strategy and marketing at Coventry University Business School in Britain. "Suddenly it's a much more open and competitive market than it once was, and I think that has contributed to the increase in values."