Commentary by Adrià Calatayud
Separate deals for the rights to stream the U.S. Major League Soccer and cricket's Indian Premier League are a strong signal that sports are prized weapons in the streaming wars. The scramble for sports programming to attract streaming subscribers is likely to boost global listed sports assets, while potentially increasing costs for streaming services in future auctions.
Soccer clubs Manchester United Ltd., Juventus Football Club SpA, Borussia Dortmund GmbH, AFC Ajax NV and Olympique Lyonnais Groupe are all publicly listed, though the extent to which each individual club benefits from higher streaming fees will depend on the distribution set by the leagues. Liberty Media Corp. has separate tracking stocks for its interests in Formula One Group and the Atlanta Braves Major League Baseball Club. Private-equity firms including Bridgepoint Group PLC has sports investments as well.
Meanwhile, streaming services, broadcasters and telecommunications groups could face an inflationary spiral to acquire or retain rights to air sporting events. Walt Disney Co. lost streaming rights to IPL cricket for the 2023-2027 period to rival Viacom18, a joint venture between Paramount Global and Reliance Industries Ltd. Disney's Star India television network will pay the equivalent of $3 billion to retain the TV rights, more than it paid for the combined broadcast and streaming package in the last auction in 2017, but was outbid by Viacom18 for the digital rights The auction generated $6.2 billion in total for the league's organizers, three times the amount reached in 2017.
Higher prices raise the bar for bidders to generate returns on their investment. BT Group PLC last month said its deal with Warner Bros. Discovery Inc. to form a sports JV in the U.K. and Ireland was partly aimed at reducing its exposure to rights costs.
Market Insights are commentary that is independent of the news coverage by reporters at The Wall Street Journal.
Write to Adrià Calatayud at adria.calatayud@dowjones.com
$(END)$ Dow Jones Newswires
June 15, 2022 10:55 ET (14:55 GMT)
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