When Manchester United took on Liverpool at Anfield in October 2016, 2m people tuned into Sky Sports to watch. The Premier League is worth a great deal to Sky (SKY). It's for games like the one aforementioned or Chelsea versus Hull (an average of 1.3m viewers) that many customers are willing to pay £50 a month for Sky TV with Sky Sports. And so, when the group's rights to the Premier League came under threat in 2015, management spent £4.2bn to keep coverage on its channels.
The rising cost of the beautiful game
Sky has broadcast the Premier League since its inception in 1992. Back then, it paid £38m for rights to the season; today that would only cover three games. The cost of broadcasting the Premier League has risen steadily alongside the popularity of football, but in recent years it has exploded due to the growing rivalry between Sky and BT (BT.A).
Amid intense competition in the mobile telecoms and pay-TV markets, both companies now rely heavily on their content to attract customers. Exclusive sports is therefore incredibly important. But by fighting for a slice of the three Premier League seasons between 2016 and 2019, the two companies drove the price up to record levels.
Worth the price?
Even taking into account the growing competition, it's hard to argue that paying so much more (83 per cent for 10 extra matches in Sky's case and 18 per cent for four more matches for BT) was worthwhile, particularly as Premier League viewing figures fell 19 per cent last year.
To a certain extent, that decline can be explained by one-off events; the start of the season clashed with the Olympic Games and a number of clubs with big fanbases were relegated. But the way people watch sport is changing. The increased use of mobile apps and social media has mitigated the risk of fans missing one of their team's finest moments, reducing their desire to watch an entire 90-minute match.
Turning social
Younger audiences are happy to get their football fixes from social media; a trend both BT and Sky have attempted to exploit. This week the latter linked up with Twitter (US:TWTR) to live stream its transfer deadline day coverage and last summer BT took to YouTube to show the entirety of the Europa and Champions League finals.
Live streaming via Twitter has been successful in drawing viewers for the NFL in the US; the 2016 season opener between the New York Jets and Buffalo Bills drew peak global audiences of 2m viewers. But there's arguably a hint of desperation in BT and Sky's decision to broadcast multimillion pound content free on the internet. The rising demand for sport on social media is an issue that could well cause major problems for both of these broadcasting behemoths in the years to come.
