Deal essential as telco aims to fire up mass pay TV subscription in Spain
MADRID – Telefonica will pay €600 million ($666 million) for the Spanish pay TV rights to the 2015-16 season matches involving Cristiano Ronaldo’s Real Madrid, Leo Messi’s Barcelona and other Spanish league teams.
Announced Friday by the Spanish telco and the LFP Professional Football League Assn., the deal is the first to result from collective bargaining by the LFP. Prior to Friday’s accord, every Spanish soccer club negotiated its own rights deal.
Deal takes in Spain’s top two divisions, the Liga BBVA and the Liga Adelante, and all pay TV rights to the King’s Cup.
For Telefonica, snagging domestic rights to Spanish league soccer matches is a necessary coup. With Germany and Brazil, Spain is one of a newly focused Telefonica’s key three core markets and content one of its key identified growth drivers. On Wednesday, Telefonica launched Movistar Plus, an ambitious pay TV offering for Spain that represents the first significant sign of crossover synergies. It follows anti-trust clearance of acquisition in May 2014 of paybox Canal Plus Spain from Prisa, merging Canal Plus, Spain’s biggest premium pay TV operator, and Telefonica’s IPTV service, Movistar TV.
Using TV subscription as a driver of quad play client take-up and offering a low basic rate of $22.20 and up for Movistar Plus but aiming in return for the mass market, Telefonica’s hope is to revolutionize pay TV subscriptions in Spain. This is by far the lowest of Europe’s big five territories, ravaged by piracy and the legacy of recession. That is simply not possible without Movistar Plus snagging Spanish soccer league rights in a soccer-mad country.
Price paid for the soccer league pay TV rights is not much higher than last season’s estimated $652.7 million. Still, Spanish soccer TV revenues remain the second most biggest of Europe’s Big Five, paling before the U.K.,’s but just besting Italy’s and far, far bigger than German and French TV soccer revenues.
Boasting many of soccer’s biggest stars — not just Ronaldo and Messi, but also Gareth Bale, Neymar and Luis Suarez, for example — the LFP aims to power up international league sales rights from $222 million last season to about $666 million for 2015-16 league games, per LFP president Juan Tebas.
International sales will reportedly be handled by Spanish media group Mediapro, which has large experience in soccer rights-broking in and outside Spain.