ESPN's Premiership TV Deal: Taking on Murdoch's News Corp?

Posted by: Mark Scott on June 23

Maybe it sounds cliché, but the English Premier League, the world’s most lucrative soccer league, is going to Disney World. Well, almost. On June 22, U.S. sports giant ESPN, which is 80% owned by Disney, bought the rights to show 46 EPL games next season to British viewers. The network will also broadcast 23 matches over the 2010/11 to 2012/13 seasons on both dominant satellite TV provider BSkyB (roughly 40% owned by Rupert Murdoch’s News Corporation) and as-yet undisclosed cable providers. According to media reports, the deal will cost ESPN £90 million ($147 million).

The announcement came after Irish pay-TV broadcaster Setanta, which spent a reported £125 ($204 million) for the soccer rights back in 2006, was stripped of its EPL deal when the company failed to pay £10 million ($16 million) in outstanding debts to the Premiership. ESPN will now add British viewers to its existing broadcast presence in Asia where it shows Premier League games through ESPN STAR Sports — a joint venture with Murdoch’s New Corp.

The deal has been a long-time coming for ESPN. Earlier this year, the U.S. network was outbid for the EPL rights by Setanta. By offering soccer to British viewers, ESPN can broaden its appeal, particularly as it currently offers mostly U.S. sports on its existing ESPN Classic and ESPN America channels available in the United Kingdom.

Forking out almost $150 million also could represent the latest move in a global race for soccer TV rights.

Disney (through ESPN) and News Corporation (through Fox, STAR, and to a lesser extent BSkyB) are spending millions to broadcast the world's most popular sport to a global audience. For sure, they're working together right now, but tensions could grow as more people around the world tune in to watch marquee events like the Fifa World Cup and the UEFA Champions League.

And there's certainly a lot of money at stake. According to consultants Deloitte, global broadcast revenue for Europe's top five leagues -- England, Spain, Italy, Germany, and Spain -- reached €3.7 billion ($5.2 billion) during the 2007/08 season. Of that, the EPL represented one-third of total revenue at €1.2 billion ($1.7 billion). Analysts expect the figure to jump even higher in 2010 when Italy's Serie A (currently Europe's fourth most lucrative league) returns to collective bargaining for its TV rights. At the moment, each club negotiates on its own, which has lessened how much individual teams can squeeze out of broadcasters.

With so much money on the table, it's likely sparks will eventually fly as the likes of Disney and News Corp position themselves to maximize their own profits. For now, though, both companies are playing nice with the EPL broadcasting rights. Who knows, we may even see Mickey Mouse ears start to show up around the Premiership next season...