IHS: Premier League rights would be an ‘unnecessary extravagance’ for Amazon

Buying a package of Premier League football rights limited to the UK and Ireland would be an “unnecessary extravagance” for Amazon, according to IHS Markit.

The research firm’s report ‘What price a bid for Premier League rights by the technology giants?’ said that while Amazon is the most hotly tipped new entrant in the live football rights race, questions remain about the likelihood of such an intervention.

IHS said it is unlikely that either Sky or BT will have to defend an aggressive bid from their rival after the two companies agreed to distribute one another’s channels on their platforms from 2019.

However, it said that even in a scenario where per-match rights declined by 30% – as they did in 2004-07 – to £7.1 million per match, a new entrant would have to offer £426 million for a 20-match package or £682 million for one of the 32-match packages.

“That is a lot of money, particularly for a business for which Premier League rights might be an interesting but far from essential add-on,” said Tim Westcott, director of research and analysis, programming, IHS Markit.

“Amazon can always negotiate a deal to distribute channels from a third party, as it already has with Eurosport in Germany. As with the other global technology giants, the question has to be asked whether a payment of more than £400 million to disrupt a mature business limited to the UK and Ireland alone is really a cost-effective investment.”

Last week separate research by Ampere Analysis said that Amazon had emerged as a “significant potential bidder” and predicted that the value of Premier League rights will break the £10 billion barrier for the first time.

Earlier this month media analysts at Berenberg predicted that Amazon is likely to win at least one package of English Premier League rights. However the same company’s telecom analyst team said they thought Amazon is unlikely to make a strong bid and that Sky and BT will remain the rights-holders but will pay significantly more for the privilege.

The English Premier League rights auction for the three seasons 2019/20–2021/22 is due to open on February 8.

The full IHS report can be accessed here.