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Kevin McCullagh | Vital signs detected in Asia-Pacific media rights markets 

Intriguing developments in Asia-Pacific media rights markets in recent months mean the picture for rights sellers is not as bleak as it looked in the depths of the pandemic last year, says SportBusiness Asia-Pacific editor Kevin McCullagh.

As a torrid pandemic period drags on, welcome green shoots have emerged in recent months in Asia-Pacific media rights markets.

Conditions in the region’s diverse markets are varied but, broadly, media-rights values have been trending downwards for several years.

This was the case even before the pandemic struck. Covid looked to have applied the coup de grâce to rights-sellers’ hopes of value growth.

Several major rights-holders were caught in the teeth of the storm, selling rights last year during the period of greatest uncertainty. The German Bundesliga and agency Football Marketing Asia, selling Asian Football Confederation rights, were among them.

A host of leading rights-holders, including most of the ‘Big Five’ European football leagues, took big hits in China when market-leading sports streamer PP Sports all but collapsed.

Sellers that avoided the worst of last year were bracing for impact in upcoming rights sales cycles.

But the last few months have seen some promising developments in important markets.

This month’s emergence of South Korea’s Eclat Media Group to fill the gap left by the closing Fox Sports Asia is one. Fox was a powerhouse in the Asia-Pacific sports broadcasting business, albeit one that had declined in recent years. Its exit threatened to reduce competition for rights in around 20 markets. Some of the pay-television platforms that traditionally carried Fox channels spied an opportunity to cherry pick its best content and drop the rest, cutting costs.

Eclat’s launch is a big endorsement of some important elements of the Fox Sports Asia model that had been called into doubt.

First, pan-regionality: like Fox, Eclat will buy rights and create channels that serve more than a dozen markets. There had been question marks over whether this model still made sense, given the diversity of the markets and growing demand for ‘localised’ content. Eclat has promised a more localised service than Fox, for example with more content being produced in local languages.

Eclat’s move is also based on confidence that linear pay-television will remain a big part of the video entertainment industry across the region.

Linear pay-television companies have struggled in recent years in the face of competition from streaming platforms.

Eclat’s CEO Mitch Hong told SportBusiness Media: “I don’t think pay-TV will go away. I’m a strong believer in pay-TV’s role for delivering sports content and also for fans enjoying sports content.”

Eclat’s emergence does not mean a certain resumption of rights-value growth in its covered markets. Indeed, the company will be looking to pick up Fox’s rights at a discount. But it is nevertheless welcome news for sellers. And if Eclat fulfils stated ambitions to become a bigger, broader, more localised sports media company, it could play an even bigger role in sports industry growth in the region in the coming years.

Australia is another market to have witnessed green shoots emerging from ground scorched during 2020. A local outbreak of the global ‘streaming wars’ has revived competition for rights, with new platforms jostling for market share. Nine’s Stan Sport and 10 ViacomCBS’s Paramount+ emerged in the last year as important new factors in the sports rights market. Amazon also made a low-key first acquisition.

Again, few mature properties can expect significant rights value growth in Australia. And the last year also witnessed a dramatic flameout in the sports streaming sector as surprise package Sports Flick tried and failed to establish itself. But the market looks healthier than it did mid-2020.

In India, intriguing tectonic shifts are taking place with potentially positive consequences for sports rights values. Values in India have for several years been negatively affected by consolidation that saw its field of four major buyers several years ago: Sony, ESPN Star Sports, Ten Sports and Neo Sports, cut to two: Sony and Star.

In the last couple of months, there have been reports in local media that giant conglomerate Reliance wants a sports broadcasting platform.

Reliance’s part-owned broadcaster Viacom18 – jointly owned with ViacomCBS – has made several recent rights acquisitions.

Reliance has been a major player in the Indian sports industry for years, including via its agency Rise Worldwide (previously the joint-venture IMG-Reliance); its ownership of the company that manages the domestic football league, the Indian Super League; and its ownership of Indian Premier League team the Mumbai Indians.

Reliance is also a telecoms giant, owning mobile network Jio, which has been credited with getting hundreds of millions of Indians onto 4G data plans. The company will soon launch a low-cost smartphone which it hopes will give another 300m consumers access to 4G and all the content and services that entails, including video entertainment.

In recent days, Sony merged with pay-television channel operator Zee in a move that is considered to have created a new giant in the Indian television business. Sony has been a distant second to Star in the pay-television business in the last few years, with the latter strengthened by its control of the rights for most major cricket properties.

A major battle for the market’s most valuable sports rights property, the IPL, between Star, Sony-Zee and Reliance-Viacom18, is considered possible.

The rights are up for renewal after next year’s tournament.

Overall, Asia-Pacific remains a challenging region for sports rights sellers. It will take more than the developments above to shift the dial back towards growth in rights fees. In certain markets, like China, recent rights fee high-water marks are not going to be witnessed again for the foreseeable future.

But each development is a significant improvement in the outlook in the affected markets.

No one will be expecting a return to the glory days of the late noughties and early 2010s, when big percentage rights fee increases were commonplace. But the picture is not as bleak as it was 12 months ago.

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