Telefonica to Pay $2.61 Billion for Spanish Soccer Rights

  • Three-year deal includes European Champions, UEFA leagues
  • BeIN Sports to join Telefonica's pay-television system

Telefonica SA, Spain’s biggest telecommunications operator, agreed to pay 2.4 billion euros ($2.61 billion) for rights to Spanish soccer and Champions League matches, a move that gives the company’s pay-TV service sports telecasts its competitors already have.

Telefonica will pay Mediaproduccion SLU for rights to the Spanish first division and two other tournaments for three seasons starting in 2016-2017, according to a regulatory filing in Madrid on Tuesday. It will also broadcast the European Champions and UEFA leagues, starting immediately and continuing through the 2017-2018 season. Under the agreement, the BeIN Sports channel will be added to Telefonica’s pay-TV services, according to the filing.

Telefonica, which broadcasts soccer through its Movistar brand, is catching up with its main rivals in its domestic market, Vodafone Group Plc and Orange SA. Both have agreements with Mediapro to broadcast the current Champions League, which started in the second half of 2015. Telefonica controls around 85 percent of Spain’s pay-TV market following the acquisition of DTS Distribuidora de Television Digital SA last year.

“The agreement reached with Mediapro over domestic and European
football means that Telefonica matches rivals for this season, while
providing a superior choice for the next three seasons,” Kepler Cheuvreux SA analyst Javier Borrachero wrote in a note to clients. “This validates the TV strategy as an enabler of customer growth and churn reduction.”

Telefonica rose 1.5 percent to 9.63 euros at 12:06 p.m. in Madrid.

A growing reliance on television content, including sports and films, to lure Spanish users helped Telefonica in the third quarter post revenue growth in the country for the first time since 2008. Revenue in the company’s largest market rose 0.2 percent in the period, the first growth since the same quarter of 2008.

Telefonica in July announced the acquisition of Spanish media rights to the 2015-2016 domestic league, the first time it did so. In recent years, the company has also acquired rights to other sports events, such as Formula 1 motor racing.

Telefonica’s expansion into sports is part of a broader trend seen in other countries as well. BT Group Plc last year agreed to pay 320 million pounds ($462 million) a year for the U.K. rights to broadcast 42 matches per season of the local Premier League between 2016 and 2019.

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