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The Billion Dollar Plan

Owen Evans looks at how NBC’s billion dollar investment into Premier League rights will take shape over the next six years.

Benedict Cumberbatch is almost eight times more attractive than the English Premier League (EPL) to United States viewers.

The British actor’s portrayal as Sherlock Holmes recorded almost four million viewers per episode in the United States compared to the Premier League’s average of 479,000 in 2014. Not the most ringing of endorsements for the EPL.

All of which begs the question, why did NBC Universal invest a reported billion dollars last month extending its deal to show Premier League football for another six years when the ratings have been steady but unspectacular so far?

It’s made all the more surprising when you consider that NBC are paying for almost 2,300 Premier League games without siphoning off the less glamorous fixtures or digital rights to rivals in order to share the burden of the initial rights fee, as has been the trend in other regions such as Europe and South America.

Tom Richardson is CEO of digital media consultancy, Convergence Media, and he believes the ‘tent pole approach’ by NBC is a gamble that will take an extensive marketing campaign in order to make a return on the billion dollar investment.

“It is obviously a bit of a gamble to put this amount of money into a product whose viewership rose by nine per cent last year,” he told SportBusiness International. “It’s interesting that they have gone for full exclusivity and while I don’t think this will be a profitable deal for NBC in the long run, it could well be a great investment into the future.

“They want to be the only place American Premier League fans go to for content.”

 

The Premier League will not be complaining, though. Rights to Premier League football have gone up exponentially in the last three cycles: Fox paid $66m for 2010/11 to 13/14, NBC paid $250m to take over the rights from 2013/14 to 16-17, and won in the first round of the latest cycle with the $167m per annum extension.

NBC will have also been aware of the Premier League’s ruthless precedent in taking the highest bidder, with cold hard cash privileged over longterm relationships, such as when Murdoch’s Fox network could not leverage value of Sky in the UK. NBC stepped in, outbid them, and won. 

Richardson said the deal is part of a wider trend of United States media groups trying to lock down top sport for as long as possible; with the emphasis on the unique value of live sport compared to commoditised content like film and entertainment, citing NBC’s deal with the International Olympic Committee that runs through to 2032, and NHL’s partnership with Rogers in Canada through to 2026.

“One area where NBC will need to make extra effort is in the story telling, especially around promotion and relegation,” Richardson added.

“There is a unique opportunity there to bring a drama to American sports fans that they are not used to having been brought up with the playoff system. The NBC team need to ensure the narrative around this is pushed in order to improve their ratings all the way to the end of the season.

“There is also the attraction of using soccer to make a long-term connection to the Millennials in the United States, as that is as good a reason as any to invest in the long-term due to the fact that these are the people who will be the influencers and executives in twenty years’ time.”

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