It’s hard to overstate the value of Premier League football to Sky. Ever since the invention of the Premier League in 1992, Sky have positioned themselves as its custodian, brining live coverage of the biggest, most important and most exciting ties in every year of its history. Along with fuelling the continued demand for live football, it gave Sky a product to build their brand around.
Even today, Sky Sports is a lynchpin of the Sky brand, and Premier League football the main draw of that service. It’s why Sky recently commitment to spending a total of £4.2 billion for exclusive rights to 126 broadcast Premier League matches a season, and why BT shelled out £960 million or 42 games per season.
However, recent news out of Sky has signalled a worrying new trend for the company, with Premier League football seeing the biggest drop in viewing figures on Sky for at least seven years, raising questions around the value of their current deal, and the viability of live sport going forwards.
Average viewing on Sky’s live TV channels fell 14% over the past season, at a time when Sky are paying more than £10 million per game to broadcast. Should the fall continue, it could be a real worry for TV networks and clubs, who rely on the income from renewed television deals to compete and drive revenue.
Sky are under pressure from a new breed of fans and customers known as “cord-cutters”, who are moving away from pay-tv subscriptions and towards web-based services like Netflix and Amazon Prime, and towards often-illegal streams of matches which they’re interested in.
The value of the Premier League, and its reputation as the richest league in the world, is based on the promise that the value of broadcast rights will climb ever higher. All auctions to date have carried that trend forwards, but should viewing numbers continue to drop, it becomes a tougher sell for broadcasters to match the big numbers currently being demanded.
Despite the fall in people sitting in front of the telly, Sky are pleased to point towards a remarkable 31% increase in viewing numbers through Sky’s streaming services like Now TV and Sky Go, which allow customers with Sky Mobile or other network subscriptions to pay a monthly fee to enjoy Sky Sports on the go.
Sky have also claimed that the dip in viewing figures – the lowest since the BARB established their revised measurement methods – came about because the revised rights deal gave them 10 more games a season, featuring smaller, less popular sides. That’s not a particularly convincing argument, since people won’t refuse to watch a popular game because it’s on the day after a less popular game.
A slightly more convincing argument is that teams with large followings like Aston Villa and Newcastle were relegated last season, so their games were on TV less than before, lowering numbers. Driving that fact home was the news that Newcastle vs. Leeds United was the most popular non-Premier League game in 2016/17 – two sides with gigantic domestic fanbases.
It remains to be seen whether viewing figures pick back up in the forthcoming 2017/18 season, but should they continue a downwards trend, we may see a radical shakeup of Premier League broadcast rights.