Amazon and Man City: An exclusive problem for the Premier League
FA Premier League (“FAPL”) clubs sell the rights to the live broadcast of their matches collectively. This means clubs do not enter into individual negotiations with broadcasters for the right to broadcast matches and instead the FAPL sells exclusive packages en bloc. The most recent sale of these packages to UK broadcasters Sky Sports and BT Sport alone brought in approximately £5.14 billion. For the 2016/2017 season, a third of the domestic broadcasting rights money was redistributed amongst the twenty FAPL clubs evenly, a third according to final league position and a third distributed according to the number of live games broadcast in the UK in which a club featured. In contrast, overseas broadcasting rights money (which generated around £3 billion in the last auction) is distributed evenly between the clubs.
For some, the relative parity in broadcasting rights money received ensures that each club benefits fairly from the commercialisation of the FAPL as a global product. This system differs to other European countries such as Italy where a majority of the total broadcasting money, domestic and overseas, is distributed according to factors such as a club’s following and final league position which tends to favour the established larger clubs.
Recent Developments
The six biggest clubs in the FAPL, Manchester United, Manchester City, Tottenham Hotspur, Arsenal, Liverpool and Chelsea were reported recently to have tried and failed to end equal distribution for overseas television money. These clubs had tried to take advantage of the growth in international rights fees to argue that the top clubs were critical in the attraction of overseas fans to the FAPL and therefore 35% of the revenue from the sale of global TV rights should be divided based on league position.
However, in a recent multimillion deal with Amazon Prime, Manchester City have found one small way around the collective rights system to maximise their own television rights income. Amazon Prime will produce a behind-the-scenes TV series following the club through the 2017-2018 season. Significantly, this will include behind-the-scenes match day footage. This follows the recent trend of SVOD services acquiring media rights from football clubs. For example, Netflix has recently signed similar deals with Italian club Juventus and Argentinian giant Boca Juniors. Such deals do not seem to be exclusive to the traditional big clubs as it has also signed a deal with Sunderland FC who sit in the EFL Championship. These series follow the tried and tested success of fly-on-the-wall sporting documentaries in the US, where, for example, All or Nothing, an Amazon Prime series, has been running for two series, each following a different NFL franchise during the highs and lows of a season.
Comment
This move by Manchester City and Amazon is interesting for a number of reasons. To begin with, it marks a departure from the collective selling of TV rights. Although this deal has been sanctioned by the FAPL, it is not hard to see how broadcasters such as Sky Sports and BT Sport may feel somewhat aggrieved at the use by Amazon of exclusive behind-the-scenes match day footage. Whilst such broadcasters may accept the use of such footage for clubs’ in-house TV channels, the sale of such rights to a household name like Amazon, and one who may even be a future rival for the FAPL live packages, may not be happily accepted. With the FAPL rights up for tender again at the end of the year, it will be interesting to see if broadcasters react to this deal and look to expand the definition of “exclusive content”.
Secondly, there has been much talk of the likes of Amazon, Netflix and Facebook pursuing one of the FAPL live television rights packages when they do come up for tender later this year. Whether they do this time or not, it is clear that sport is integral to these services as they look to compete for premium content to attract and retain subscribers.
