Lega Serie A and Sky: to bid or not to bid

The sports broadcasting rights market is transforming and the news earlier this week that Lega Serie A is reportedly considering making a bid to acquire all or part of the country’s leading pay TV operator Sky Italia adds colour to the view that sport rights holders are eyeing new business models to ensure they’re not left behind holding the short end of the stick.

According to the Italian newspaper, La Stampa, the Lega Serie A bid could be for the acquisition of Sky’s sports division only, or for all of Sky in partnership with a third party, with a number of banks expressing interest in participating, including JP Morgan, Goldman Sachs and Barclays.

Omdia’s senior principal analyst, Tim Westcott cautions that any bid would attract significant regulatory attention. “There would almost certainly be a review by competition regulators in Italy or at European level, given the position of the Lega and Sky in the Italian TV market,” he says.

The Italian football league is already broadcast by Sky Italia in the country, alongside key rightsholder DAZN, Telecom Italia, Mediaset and OneFootball.

Depending on the details of the proposed bid, Westcott says that “competitors like DAZN, Telecom Italia, Mediaset and Warner Bros. Discovery would all be highly concerned about possibly having reduced access to Serie A matches. Of course, there is a lot more to Sky than its sports content – so there are lots of parts of its business which are unfamiliar to the typical football club.”

Comcast-owned Sky has been feeling the full brunt of the loss of sports programme licensing agreements in Italy and Germany including the forfeiting of key Serie A football rights to DAZN, after content revenue fell by 14.3% to US$295 million in Q1 2022.

The move from the football league is reportedly an aim to create a Serie A TV platform tapping the infrastructure, organisation and customer base of the pay-TV operator. However, Westcott further adds that the proposal could be an attempt by the league to create “more visibility about their future revenues from selling their TV rights, as well as more direct access to revenues as well.”

In any case, whether Comcast would be prepared to sell Sky Italia is questionable following significant investments from the US company into the Italian operation in recent years.

However, the media giant is believed to have considered the sale of its underperforming German operation, Sky Deutschland, which lacks the broadband and mobile phone base of Sky in the UK. Reuters reported in November that ProSiebenSat.1 could be interested in acquiring the struggling opertor.

“We are certainly seeing more of a trend to sports rights owners operating their own platforms, but on the other hand most are happy to take a big cheque from a media partner when it’s on offer. The Lega has had a tough time making recent auctions succeed,” says Westcott.

Introducing such a model could follow a pattern similar to that seen in the US like the NFL subscription streaming app NFL+. Westcott points to similar examples such as “the Portuguese clubs like Benfica” or the Eredivisie in the Netherlands.

“The Dutch Eredivisie clubs have a long-running joint venture with Disney that seem to have been a success. There have been links between business moguls and sports clubs – like the Berlusconi family with AC Milan and Andrea Radrizzani with Leeds United,” he says.

As of now, Lega Serie A president Lorenzo Casini and CEO Luigi de Siervo have neither confirmed nor denied the suggestion that the league could go it alone, after the pair announced there was “nothing concrete to report” following the league clubs’ meeting this week. This gives credence to the view that the move could be a tactic “designed to give potential bidders a scare as the Lega prepares to licence its rights,” argues Westcott, with the current rights deals for Serie A set to expire next year.