European Football media rights values are plateauing
Domestic media rights values have stalled among the Big-5 leagues in European Football, as a lack of broadcasters limits the competitive dynamics that drive revenue growth
Football media rights are up for grabs
Recently, the German Football Association DFL initiated the tender for Bundesliga’s domestic TV rights, covering the 2025/26 to 2028/29 seasons. This event marks an opportune moment to examine the European football arena and its media rights situation. We will compare the domestic TV rights1 of the Big-5 Leagues — the English Premier League (EPL), Spanish La Liga, German Bundesliga, Italian Serie A, and French Ligue 1 — and assess their current situation.
The Bundesliga’s tender is only the latest in what has been quite a busy few months, with both the Premier League and Serie A penning new domestic media rights deals this fall, and with Ligue 1 pulling back out after having received only underwhelming offers compared to what it perceives its domestic rights being worth. The dynamics in the European TV landscape are noticeably different to the US market and what we looked at recently with the NFL. European Football has reached a mature market stage in its domestic rights over the last couple of rights cycles, despite following a media disaggregation approach so successfully pioneered by the NFL.
The major limiting factor that has plagued the domestic European Football rights market is the lack of viable broadcasters that can realistically bid for these football rights in an environment where they had exploded in value over the 2010s. With European broadcasters consolidating, the competition for these rights packages is less fierce than in the US, subsequently not generating the same upward spiral in value creation. The future growth of media rights now primarily hinges on the international rights sold by these leagues, as well as additional commercialisation outside of TV-rights.
The Bundesliga will serve as the next intriguing case study as to how European Football value generation from domestic rights will evolve. As we can see historically, the Premier League has commanded the largest media rights revenue on an annual basis, with the Bundesliga, La Liga and Serie A all around the same figure and the Ligue 1 a distant 5th. Future values have been provided as far as deals have been struck, with only the EPL and Serie A having deals for the next cycle signed.
The EPL takes in an astonishing €1.75bn on an annual basis currently, but has been stagnating at this level for three cycles now (during COVID most leagues renewed their existing deals with basically the same terms for another cycle), which is a common pattern amongst all leagues. There was an initial spike in valuations in the mid-2010s, when all Leagues managed to 1.5x-2x the annual revenues generated from media rights.
Premier League
The EPL stands as the most lucrative domestic football league in the world. It’s current domestic media rights deal bringing in a hefty €5.3bn for three seasons from 2022/23 to 2024/25. Despite generating more revenues from their international broadcasting rights nowadays, and more plentiful growth to be expected from there, the UK market remains the primary due to the sheer size of revenue it alone generates.
The current partnerships the EPL has with Sky Sports, TNT Sports and Amazon Prime were signed in the absence of a formal bidding process, with the pandemic still ongoing the last time the rights were up in 2021. All broadcasters agreed to roll over the existing arrangements they had with the EPL for another 3-year cycle. In December of 2023, after much speculation if DAZN or another streamer would aggressively pursue any of the five packages put out by the EPL, a new 4-year deal was signed without much fanfare, with Sky Sports, TNT Sports and BBC (highlights package) all returning and only Amazon stepping back. A domestic TV-deal at total value of £6.7bn (~€7.2bn) was signed, amounting to an annual value of €1.8bn. This deal represents a modest increase from the previous cycle, but also highlights the saturation in the domestic market, considering barely any movement has happened since the 2016/17 season.
Of note is that the new deal comes with a larger selection of live games sold overall across the packages, totalling 270 (~70% of total EPL games). Technically, while the overall annual fee for broadcasters has risen marginally, they do receive more live games to broadcast, resulting in the cost per live game to actually drop for them. This is a further indication of a saturated domestic football TV markets and a challenging rights market, with new packages being used to “artificially” boost the overall bottom line, while actually being cheaper on a per unit basis for the broadcasters.
How come only around 70% of the games are being televised live? There is actually a rather bizarre reason for this. There is quirky rule in the UK, colloquially known as the “3pm blackout”, prohibiting the live broadcast of matches between 14:25 and 17:25 GMT on Saturdays in the UK. This rule, dating back to 1960, was designed to encourage football fans to support local, lower-tier clubs in person at the stadium, rather than staying home to watch an EPL game on TV. Broadcasters can only televise early or late Saturday games live in the UK, not the afternoon ones, which there is quite a few of every matchday. If you ever wondered why the likes of United, Liverpool, Chelsea, Arsenal and City always play on Sundays or in the early/late window on Saturday, there is your answer. Broadcasters want to show the high-profile games on live TV.
The EPL can continue to sustain its financial might over the other leagues in Europe, despite not seeing much growth in its domestic revenues, as the other Big-5 leagues are experiencing the same market value saturation. However, the EPL’s global appeal and allure give it an edge in international markets, further widening the gulf in European Football.
Serie A
Now let’s move on to the Italians. True to form, the tender process was a bit wilder here than for the EPL. In October of 2023, the Serie A inked a five-year deal with DAZN and Sky Sports over €4.5bn, covering the 2024/25 to 2028/29 seasons, averaging €900m annually. DAZN guaranteed around €700m for 266 games, with Sky contributing the other €200m for 114 games. This represents a modest decline to the previous annual TV-rights deal, which was around €930m. The outcome was sobering reality-check for the league and clubs, as they aimed for a three-year €3.6bn deal (annually €1.2bn) or a five-year €7.2bn deal (annually €1.44bn). There is also a revenue-share component as part of the DAZN contract, linked to performance criteria such as subscriber growth, which could elevate the figures a bit, but it will still come in below what they had hoped for.
The Serie A had unanimously rejected the initial six offers they received, as none had come close to their minimum threshold of €1.15bn they had hoped for annually. At one point, with negotiations at a standstill, the Serie A seriously floated the idea of setting up their own direct-to-consumer (DTC) business, potentially distributing games directly to pay-TV providers or via their own streaming service. Just imagine for a second, the Serie A taking such a bold leap and having to produce and distribute the games themselves…this would definitely not have ended in chaos at all. Would have been very fun though, and a jolt to the industry, differentiating itself from how any of the other Big-5 leagues handle TV-rights. Ultimately, the idea shelfed as the numbers didn’t quite add up and the risk in lost revenues for such a standalone service was too high. SSC Napoli owner Aurelio De Laurentiis was the strongest advocate for the DTC model and vehemently opposed the deal that Serie A eventually signed, calling it:
“A total defeat for Italian football. […] With this offer football will die. Sky and DAZN are not competent, they are not good for Italian football.”
Safe to say, he wasn’t totally enamoured with the new deal. From a macro-perspective, the market was probably not quite ready for this radical approach, even if it would have been a fun experiment to see unfold. Nevertheless, be on the lookout for this topic to resurface when it comes to negotiating the next rights cycle. In the end, there was not enough competitive tension to generate any positive growth for Serie A, with only the two incumbent partners being realistic bidders, both unwilling to break the bank.
Ligue 1
Where to start with Ligue 1? This is an absolute mess, for real. A saga of missteps and miscalculations at every corner.
The Spanish media agency Mediapro had a four-year deal in place with the league, paying out €814m annually from the 2020/21 until the 2023/24 seasons (with beIN Sports contributing an additional €330m annually), though they bailed on the agreement only months into the partnership (probably realizing nobody sane would pay that much for Ligue 1 rights, making it impossible to ever recoup the investment, but that is just an educated guess). Clever as ever and in a show of unparalleled incompetence, Ligue 1 had not done a proper due diligence and had not gotten sufficient guarantees from Mediapro to avoid this fiasco. As a fun little aside, Serie A pulled the plug on a deal with Mediapro in 2018, due to the absence of suitable financial guarantees.
The whole Ligue 1 media rights chapter unfolded like a bad case study taught at uni. With COVID hitting in the winter/spring of 2020, Ligue 1 was the only one of the Big-5 leagues to completely cancel the season. This irked then rights owners at the time, Canal+ (owned by Vivendi), who were already sour from losing out to Mediapro, with their chairman noting, “I am disappointed that we didn’t keep the rights but the price was completely unreasonable. It was impossible for us to make these sorts of figures work and I believe it’s impossible for any actor in the sector to make these sorts of figures work.” Shocker, he was correct (our Canal+ friends will come into play again shortly).
The house of cards did not take long to collapse. Mediapro had set up a subscription channel Téléfoot to show 8 Ligue 1 and 10 Ligue 2 games per matchday, at a €25/month. To break-even they would have needed 4m subscribers, they managed a paltry 600k. Not a good start. Mediapro then missed multiple payment deadlines in October and November, resulting in the termination of the partnership. Mediapro had paid a grand total of €100m of €324.8m they owed for the first four months of the league (not even close to the €3.25bn they had agreed upon for the four years). Not a good sign for Ligue 1 and its clubs, who were still reeling from the loss of revenue due to the pandemic and the cancelled season. The clubs managed to survive only due to a pair of government-backed bank loans.
The return of Canal+ did not take long, as they sensed an opportunity to get a cut-throat deal at a significant discount to take over the rights Mediapro had, even paying less than in the previous cycle. When this did not materialise, Canal+ requested to return their sublicensed rights from beIN, which they were paying €330m annually for two games a week, and challenged the league to restart the tender process anew. In an entertaining twist to all of this, the league offered Amazon the cut-rate price Canal+ was vying for, paying €275m a season for the 8 games a week Mediapro had, until the 2023/24. Top tier shithousery by the Ligue 1, undercutting a long-term partnership they had built with Canal+, in order to attract a sexy deep pocketed tech streamer. This would definitely not come back to bite them again….surely not.
All of this was needed context to get us to the current rights tender, which they opened in September of 2023. In the most unforeseen twist of all-time, Canal+, which had been showing Ligue 1 games in France since the pay-TV channel launched in 1984, backed out of the rights auction. Not off to the best start, with one major bidder down, but they still had DAZN, beIN Sports and Amazon that could submit competitive bids. Long story short, only DAZN and beIN Sports submitted bids, which did not meet the league’s expectations of of €1bn annually (was never going to happen in this media market environment), so the league cancelled its domestic rights auction in October of 2023. Ligue 1 now hopes to engage with Amazon and Canal+, both of whom had not submitted any bids, to increase the competitive dynamic for the TV rights and are awaiting the outcome of their international rights tender, before deciding how to continue on the domestic rights front.
All in all, an absolute shitshow, where the current status is not astonishing at all, given all the missteps the league has taken. It is a result of overestimating one’s own market value, being blinded by large numbers that could not possibly have been paid and tarnishing decades long relationships to make a quick buck. Once Mbappe is finally released from PSG to a competitive league, it will probably be the final nail in the coffin for the aspirations of the Ligue 1 to play with the other big dogs in European Football.
Is there any light at the end of the tunnel for European Football media rights?
The remaining two leagues from the Big-5 are currently still in their existing TV-deals and have not recently sought out/signed new domestic deals for the next cycle, with the Bundesliga just now starting its tender. However, their annual rights values have seen a similar plateauing since the mid-2010s and they are likely to encounter a similarly challenging market environment, though perhaps not as tumultuous as Ligue 1’s experience. In general, there are a few key drivers shaping the domestic media rights market in European Football:
- Limited competition for broadcasting rights in the European market, diminishing the upwards price spiral, unlike the American media ecosystem with many more broadcasters and streaming players
- Domestic market saturation has seemingly been reached (e.g. in the UK, a fan might spend around £1000 annually to access all the subscriptions required to watch every EPL game). There’s a cap to how much consumers are willing to spend and the share of wallet you can get from them
- Increased competition from alternative forms of entertainment, be that streaming services, Social Media, YouTube, etc.
It is not all doom and gloom though. While domestic media rights values may be approaching a plateau in their revenue generation, there is still robust potential for growth in international markets, which will be crucial for the Big-5. It will be essential to monetize on a global basis and identify the industry trends and how they are shifting and adapting accordingly, where the topic of launching own proprietary DTC services will definitely become a more frequent topic as well.
To ensure further growth and financial stability the leagues and especially the clubs themselves will need to focus more on activating a more commercially focused business model, as they can no longer rely on exponential broadcast revenue growth.
(Also, don’t do whatever Ligue 1 did in the last few years)
One random fact
Real Madrid generated the highest revenue out of any football club in the 2022/23 season, with €831.4m, pushing Manchester City back down to second place with €825.9 and PSG in third at €801.8 (though both City and PSG are under investigation for inflating their financials, specifically the value of their state backed sponsorship agreements, so let’s take these two numbers with a grain of salt)
For a complete view on the top revenue generating clubs, check out Deloitte’s latest Football Money League 2024
We are all ready and set now!
You should now be up to speed on where all the Big-5 leagues stand with respect to their domestic media rights and hopefully have a better appreciation of the economics behind these rights deals and tender processes as a whole.
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