Sky Retains Grip on German Soccer in $5.3 Billion Auction

  • Discovery Communications wins right to show Friday match live
  • TV companies vied for Bayern Munich, Borussia Dortmund games

Sky Plc has to share the rights to live German soccer with Discovery Communications Inc., though will broadcast the vast majority of the games after the league raised $5.3 billion in the country’s biggest such auction to date.

Sky won the rights to show the Bundesliga matches on Saturday and Sunday -- the most important days -- across its TV channels and the web, and will broadcast 572 live games from the summer of 2017 until mid-2021, according to e-mailed statements Thursday. Sky rose as much as 4.3 percent in London.

Discovery’s Eurosport channel won the Friday evening game after the Bundesliga introduced a so-called no-single-buyer rule, meaning Sky wasn’t allowed to retain all live-match rights. While Sky lost some games and saw costs increase “significantly,” it avoided having to compete against major phone companies including Deutsche Telekom AG, who opted not to bid aggressively, said Erhan Gurses, an analyst with Bloomberg Intelligence.

The no-single-buyer rule, demanded by the country’s telecoms regulator, doesn’t necessarily mean consumers will have to sign up for more than one pay-TV product, as companies can sell each other sub-licenses.

Sky filed a complaint against the rule at a court in Dusseldorf, saying it wasn’t necessary under antitrust laws. The company says it still won rights to show 93 percent of the games live -- remaining the dominant pay-TV provider for German soccer. Its shares were up 2.9 percent at 955 pence as of 4:18 p.m. in London.

The auction proceeds of 4.64 billion euros ($5.3 billion), or about 1.16 billion euros a season, for domestic rights make it the biggest ever in the soccer-crazed country, where Sky has relied on Germans’ passion for teams such as Bayern Munich and Borussia Dortmund to become the dominant pay-TV provider.

Sky said it’ll pay an average of 876 million euros a year for the rights, up from 486 million euros a year under its existing contract.

Amazon Entry

Amazon.com Inc. emerged as an entrant buying Bundesliga exposure by winning the audio rights in Germany for web and mobile distribution. It’s the first time Amazon acquired rights to a major soccer league, Bundesliga said.

Perform Group, the company backed by billionaire Len Blavatnik that runs sports websites including Spox.com, won the rights to show Bundesliga highlight clips online, a package currently held by Axel Springer SE. Perform previously snatched from Sky the contract to show the Premier League in Germany.

Sky’s hold on German soccer dates back to the early 1990s, when its predecessor Premiere showed the first games live. The last time it lost the rights was in 2005, when cable operator Unitymedia GmbH beat Premiere, causing the company’s shares to collapse as much as 43 percent in one day. In the last auction, the rights sold for about 660 million euros a season.

Before it's here, it's on the Bloomberg Terminal.
LEARN MORE