Astro All Asia Networks plc has won the bid for the rights to broadcast the Barclays Premier League (BPL) for the next three seasons for about RM800mil, sources told StarBiz.
The vendor of the BPL rights is Britain-based Football Association Premier League (FAPL).
Over the last few weeks, a bidding war had erupted for the much-sought-after BPL rights, with Telekom Malaysia Bhd (TM) and ESPN STAR Sports believed to have been involved.
Despite emerging victorious, Astro will still have to grapple with how it is going to recoup the high fees it is paying for the rights, believed to be at least 50% more than what it had paid previously.
The cost of BPL content makes up about a third of Astro’s total content cost and is not profit generating in itself. But BPL is still a major pull factor for Astro’s Malaysian subscribers.
An analyst said there was a limit to how much Astro could raise prices for its sports package as it would not want to risk losing customers. That means that its profit margins may take a hit.
On the other hand, Astro would no longer have to buy BPL content from intermediary ESPN STAR Sports, which was the previous successful bidder.
Buying the rights from ESPN also involved some unfavourable terms, where most of the revenue comes from advertisements shown during intervals of BPL games belonged to ESPN.
“If Astro is able to keep those ad revenues, this should help it stem the margin erosion,” the analyst added.
Astro is also likely to produce the entire BPL show – which includes talk shows and match analysis – now that it owns the rights directly. Previously, ESPN had done so and had factored that into its price to Astro.
It is believed that TM had sought to buy the BPL content to make its planned broadband TV service attractive.
However, it is unlikely TM will have had its infrastructure for broadband TV up and running in time for the next BPL season. Hence, if it had won the BPL bid, TM might have had to resort to re-selling the BPL content, possibly to Astro.
Astro’s established network and subscriber base is another factor that FAPL is likely to have considered when awarding the bid. - TH E STAR
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