Premier League’s pay-TV model is on borrowed time

This week five men were found guilty of illegally streaming live Premier League games and sent to jail for a total of more than 30 years. The UK-based fraud had more than 50,000 customers and generated £7mn over five years.

The Premier League, which brought the case as an unusual private prosecution, takes these matters seriously. Piracy is a significant threat to the lucrative pay-TV model that funnels billions of pounds into European football each year. English football’s top competition receives way more revenue from broadcasters than any other league, helping even smaller clubs bring in elite players and coaches. 

But the case is also a reminder that criminal enterprises see plenty of opportunities to exploit a fragmented TV market that has driven up costs for consumers while offering limited access to the core product. 

A Premier League fan in the UK wanting to watch all live matches made available for TV this season now has to pay for three subscriptions, not one. The combined cost annually for the required logins to Sky Sport, BT Sport and Amazon Prime topped £800 this year. In a cost of living crisis, watching live football on TV is a luxury. 

Even then only 200 of the 380 games in a Premier League season are broadcast domestically — the result of the so-called 3pm blackout designed to keep people going along to games in the lower leagues rather than watch top tier matches from the sofa. 

The debate over how Premier League broadcast rights are sold in the UK has been rumbling for more than 20 years. The existing set-up is the result of a European Commission ruling that forced the league to divide its rights into bundles to be auctioned off separately, thus depriving Sky of what was then an effective monopoly. 

The hope was to increase competition for the benefit of customers, but the opposite has happened. Costs for broadcasters have soared, which has then fed through to higher subscription fees. 

International fans get much more for their money. In Hong Kong, for example, £50 a month will get you every single Premier League match, along with Spanish, French, Italian league games — plus all the European club competitions. 

As an industry, football is hooked on TV money. Clubs need the big lump sums they’ve grown accustomed to from traditional broadcasters to pay transfer fees and player wages. Pay TV is reliant on live sport to justify the high monthly bills. 

But this business model appears to be on borrowed time. Recent polling by YouGov showed that while 75 per cent of sports fans aged 55+ watch matches live on TV, that number drops to 36 per cent for those aged 24-35, and even lower for younger audiences. 

While the overall value of football’s media rights appears to have been relatively steady recently after years of strong growth, Enders Analysis warns that the true picture has been obscured by inflation. “The total value of European football rights is in significant decline,” it said in a recent report. Club owners across the continent are already sounding the alarm. 

Rivals in football and other sports are beginning to explore the alternatives. Germany’s Bundesliga and Serie A in Italy have both raised the prospect of launching their own streaming services to deliver games directly to consumers, something Spain’s La Liga already does for UK-based viewers. Indian fans of Formula One can get direct access to live races for around $30 a year through the F1 app.

A big test of where things stand will come later this year, when the Premier League tenders domestic broadcast rights for the first time in six years. Ligue 1 in France and Serie A will also hold TV auctions. 

Hopes that Silicon Valley’s streaming platforms will come to the rescue with big offers seem disconnected from the realities of a chastened tech industry. Pay TV companies are in retrenchment mode.

The captains of the football industry need to think big if they are to keep the pirates at bay.