Bundle/Unbundle - a new sports media podcast

Premier League concessions, the battle for the Bundesliga and the return of an old name

Bundle/Unbundle is our new regular podcast strand that reviews the sports media market. With co-host Yannick Ramcke, we’ll keep a watchful eye on the latest stories covering broadcast and digital platforms. The title comes from a quote.

‘There’s only two ways of making money in business’ said Jim Barksdale, founder of Netscape and one of the early internet pioneers. ‘One is to bundle; the other is unbundle’. (Here he is talking about it with Marc Andreesen, who elaborates)

Andreessen: I think a lot of it is based on the underlying technology change. The way I think about it is — at least in the world that I work in, sort of tech and Internet media — bundles emerge as a consequence of the current technology. And so the newspaper bundle, the idea of this slug of news and sports scores and classifieds and stock quotes that arrives once a day was a consequence of the printing plant. Of the metro area printing plant, of the distribution network for newspapers using trucks and newsstands and newspaper vending machines and the famous newspaper delivery boy. That newspaper bundle was based on the distribution technology of a time and place.

When the distribution technology changed with the internet, there was going to be the great unwind, and then the great rebundle, in the form of Google and Facebook and Twitter and all these new bundles. I think music is a great example of that. It made sense in the LP and CD era to put eight or 10 or 12 or 15 songs on a disc and press the disc and ship it out and have it sit in storage until somebody came along and bought it.

But, when you have the ability online to download or stream individual tracks, then all of a sudden that bundle just doesn’t make sense. So it collapsed apart into individual MP3s. And I think now it makes sense that it’s kind of re-bundling into streaming services like Pandora and Spotify.

Chances are the story of sports media will follow this pattern.

The Premier League’s Expected Product

I’m not sure who Philip Kotler supports, but he gives good graph when it comes to the near future of media rights negotiations. Basically, what is desirable today becomes expected tomorrow.

The power dynamic between rights holders and broadcasters is the bit of the puzzle that interests me most. At this moment, TV has the upper hand, the leverage. The leagues are desperate to get back on telly, and to reduce the rebates they owe due to lost games - see Deloittes’ estimates as to the extent of the hit the clubs are taking. The question is what have the leagues given away to get the talks over the line, and will those concessions become a de facto part of what a media rights deal looks like from here on in. 

Here’s three pressure points to start with.

Inventory: As Yannick says in the podcast, the Premier League has traditionally limited the number of games available to broadcasters in the domestic market, so they had some flex in the system: 200 of the 380 games are sold for live consumption across Sky, BT and Amazon. Of the remaining 92 games left to play to end this season, 47 were already due to be televised, which left the remaining 45 to be shared out across the three platforms and the BBC. 

Kick off times: Eleven pushed hard to get the 3pm embargo lifted in Spain. It was opened up for Sky in the UK as part of the current covid snafu. Then there’s demands to cater for the legendary ‘Asian viewer’, which will push kick offs later in the evening, or earlier on a Saturday. Either way, fans won’t be happy.   

Access: Sometimes it feels like the story of football and television is a slow battle to get the cameras in to the changing room at half time. The hallowed area that remains out of sight. See also the team room at the Ryder Cup. All those Netflix behind the scenes documentaries are just adding to the pressure. Soon it will seem odd that we don’t get in to watch, and judge, the half time team talk. Side bet, this will see a decline in the myth of the manager as all seeing god figure. (Cameras in the dressing room will reveal a spectrum that runs from Barry Fry at one end - oranges and a bollocking - through to Pep Guardiola, yoga and Sun Tzu Art of War recitals).  

Why did Amazon get games and is this the mainstreamification of Twitch?

Ok, that’s not a word, but the point is valid. Amazon paid for twenty games this season and got twenty games, so the decision to give them some extra feels like a nice bit of long term relationship building by the Premier League. As Yannick points out, the next few weeks will see a whole new group of people finding and then using Twitch for the first time. They won’t stay for Call of Duty but they might get used to the engagement tools.

Amazon is planning to stream live Premier League fixtures for free on Twitch in the UK as it aims to give fans the chance to interact with each other while games are being played.

Twitch is hugely popular with gamers and Amazon thinks its chat feature will enable users to behave like pundits and share their views on the match as it happens. It is the first time Twitch, which Amazon acquired for $970M in 2014, has been used to show Premier League football.

Amazon will also make games available for free through Prime Video after securing an additional four fixtures as part of the Premier League’s coronavirus restart strategy. Its coverage gets underway with Crystal Palace vs Burnley on June 29.

Just flagging what links Axel Springer and the Bundesliga

Axel Springer acquired a broadcast license last year, backed heavily by p/e giant KKR, which has built an almost 50% stake in the publishing company. It’s been a fringe player thus far, and is still just a highlights contender for this time around, but a longer term play seems logical. This from Sportcal last time around:

Axel Springer, the German publishing group that owns the popular Bild tabloid, has played down the chances of continuing its digital clips coverage of German soccer’s top-tier Bundesliga beyond 2017 if the rights attract bids that are significantly higher than what it pays at present. The Bild subscription service launched in 2013 following Axel Springer’s acquisition of Bundesliga digital clips rights in a four-year deal worth €5.5 million (now $6.3 million) per season.

KKR is deeper in to German football media than just Springer however, and are referenced in this piece by Murad Ahmed in the FT, about the return of Bundesliga.

Bundesliga has retained Japanese bank Nomura to deal with financial institutions seeking to provide “bridge financing” for the league, should the season not be completed — still a possibility if a second wave of the virus hits. Private equity groups Apollo and KKR are among those to have made approaches to offer loans that would be secured against future media rights deals, according to people familiar with the talks. 

See also CVC going for Serie A, a story originally broken by Elisa Anzolin and Elvira Pollina at Reuters.

CVC Capital Partners has entered into exclusive talks with Serie A to invest up to 2.2 billion euros (1.95 billion pounds) into Italy’s top-flight soccer league’s broadcasting rights business, sources familiar with the matter said on Thursday.

The deal could give the league’s clubs fresh resources to cope with growing challenges to the broadcasting rights business, as the coronavirus crisis prompts pay-TV broadcasters to tighten their purse strings.

Under CVC’s proposal, the fund would buy a stake of up to 20% of a new company which would manage Serie A’s media rights for 10 seasons, a venture which CVC values at around 11 billion euros, one of the sources said.

Fancy coming on?

For future episodes we’d love to incorporate questions from listeners, which could be by email or if you want to send a WhatsApp voice message or something similar we can play that on the podcast. You can do this via the sign up page on unofficialpartner.com just label it ‘Bundle’.