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Telefonica's paybox, Mediapro inked a $2.6 Billion pay TV soccer deal

MADRID — Giant telco Telefonica’s paybox Movistar will offer free-of-charge the remaining matches of the European Champions League’s current season for the users of its service Fusion Plus, the company announced Jan. 27.

On Jan. 12, in a move which could trigger a new soccer rights war in Spain, this time between its telcos, Telefonica and rights broker Mediapro agreed that Movistar Plus will offer broadcasting rights to European Champions League and Spain’s La Liga competitions. The telco reportedly paid €2.4 billion ($2.6 billion).

Tying down lynchpin soccer rights, Telefonica can be seen as reacting to the promotional soccer TV offers launched over the summer by rival telcos Orange and Vodafone, with a $11 monthly subscription for 2015/16 soccer season, including LaLiga and Champions League TV rights. If all such loss-leading offers have a more than immediate future remains to be seen.

The Mediapro pact allows Movistar to include in its TV offer a BeIN Sports channel, a joint venture between Mediapro and Qatar-based network Al Jazeera. It will broadcasts all Champions League matches, as well as the UEFA Europa League competition, now down to the last 16 teams, for the remainder of this season as well as the next two seasons.

The crux of the Movistar-Mediapro deal, however, could well be its launch, exclusively on Movistar, of new channel BeIN Sports LaLiga from the 2016/17 season through 2018/19. BeIN Sports LaLiga will air live eight First Division matches every match day, a package always including one “Clasico” Real Madrid-Barcelona clash.

Telefonica already committed $0.83 billion with Spain’s LFP Professional Football League Assn. to broadcast, in a “El Partidazo” (“Big Match”) slot, at least one match from Barcelona or Real Madrid each match day, plus a crunch Barcelona-Real Madrid game each season for the period 2016-2019.

Despite Telefonica and Mediapro having announced Movistar’s exclusivity of LaLiga pay TV rights for the next three years, Telefonica’s main rivals in Spain, telcos Orange and Vodafone, claim that Telefonica has the obligation to include these rights in its wholesale offer to third parties. Another Spanish soccer legal battle may be on the cards.

Orange and Vodafone are offering Champions League and LaLiga matches of the current 2015/2016 season but the key is LaLiga rights for upcoming seasons.

Rivals consider that Spain’s antitrust National Commission on Markets and Competition (CNMC) will force Telefonica to re-sell them its LaLiga matches lineup, although they will have to take on board the high price the Spanish telco has paid for the rights.

The purchase by Telefonica of Prisa’s paybox Canal Plus, approved in April by the CNM, came with a bevy of antirust rulings, including a commitment to make available a wholesale offer of 50% of its premium content to rival pay TV operators in Spain.

Compared to the price paid for the current 2015/16 soccer season, LaLiga and Champions League TV rights will have climbed in value by 31% to $1.14 billion for each one of the next three seasons.

The hike will probably be passed on to consumers, said a Madrid-based analyst. He added that the Movistar Plus soccer package, paid for the current season at a monthly rate of $27.3, could increase in price to north of $35 per month.

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