Hey Sports Tech Fans,
Yesterday the Premier League announced that it has terminated its contract with PPTV in China. The company is owned by Suning holdings, who you may know also own a 70% stake in Inter Milan.
The deal was worth $650 million over three years and was the largest international rights deal that the Premier League has ever done. PPTV paid 12 times the value of the previous deal at the height of the Chinese football boom.
The move isn’t a political one, but came about as a result of Covid and PPTV withholding £160 million in March for the first years payment.
Obviously there has been huge issues in the sports rights market with sports going on a three month hiatus.
PPTV tried to negotiate down the value of the deal but the Premier League have decided against renegotiating the deal or the payment schedule.
Will this have a knock on effect on the clubs whose finances are already heavily impacted by Covid?
Clubs have been more conservative than in recent years (Chelsea being the exception) in the transfer market and this could add more pressure on their finances.
What will the Premier League do now with rights for China?
The value of a new deal will almost certainly be lower given the uncertainty the sporting world is in right now.
Will another of the big Chinese players come to the table and acquire the rights for the most popular league in China? (as per Mailman’s Red Card report)
Will we see the likes of Tencent enter the fray?
They have more than a one third stake in two of China’s biggest live streaming platforms, Huya and DouYu.
Will Alibaba’s YouKu pick up the rights?
YouKu have previously won rights for the FIFA World Cup and with pockets as deep as Alibaba’s they could certainly enter a bidding war.
More interestingly for me would be the Premier League using this opportunity to grow their own TV channel in China with an OTT platform to target the younger generations.
When La Liga sold UK and Irish rights to Eleven Sports, the deal hit a snag as Eleven didn’t have any traditional TV channel, which meant pubs and bars across the UK and Ireland suddenly couldn’t show Spanish football.
Subsequently La Liga pulled the deal and launched their own TV channel in a partnership with Premier Sports.
Could the Premier League find a similar partner in China to get deep access to the traditional TV viewers in China with customised content and commentary for that market?
The OTT offering would offer a huge potential upside with the China being world leaders for live streaming content both in terms of the technology and integration used but also in pure viewing numbers and consumption hours.
The Premier League is at a cross roads.
Finding a new bidder is the path of least resistance but if the value of a new deal doesn’t live up to the previous deal then I would like to see the Premier League take the bold move to run things themselves with partners in China to help them navigate what is a very big technical and cultural challenge.
Have a great sporting weekend,