Spain’s Telefonica wins La Liga rights for €2.9bn

Mobile phone firm Telefonica outbid its main rival Mediapro for the bulk of broadcast rights to Spain’s top soccer league, paying €2.9 billion for three seasons.

The deal gives Telefonica direct control over La Liga matches starting in 2019, putting an end to a wholesale arrangement with Mediapro. The total auction proceeds of €3.4bn compare with a combined €2.95bn that Mediapro, Telefonica, and others offered for the prior three years.

It’s a surprise win for Telefonica, which had indicated it would bid cautiously while focusing on reducing debt. Telefonica agreed to pay €980m per season, slightly less than its previous three-year deal, the Madrid-based carrier said. That gives the company two packages of rights to nine live games per match day.

The Spain auction contributes to a mixed picture for the value of soccer rights in Europe. While recent auctions in England and Italy have dipped in value, the sport has benefited from steep inflation over the past decade as telecom carriers began competing with broadcasters for content that could help them retain broadband subscribers.

New interest from web giants including Amazon.com Inc has raised some expectations that rights values will keep rising.

For Telefonica, the deal “removes significant uncertainty” and gives the company more control over how it broadcasts matches and has the opportunity to boost advertising revenue through its Movistar TV channels, Berenberg analysts Nicolas Didio and Usman Ghazi said.

Telefonica shares which were little changed have dropped 18% from a year ago. “Telefonica has always defended that the LFP matches are a very attractive content, but that its acquisition had to be carried out at the appropriate price,” the company said in a filing.

Mediapro was awarded rights to highlights and to broadcasting for public spaces such as bars and restaurants. After the prior auction in 2015, Mediapro, which doesn’t have a major broadcasting platform of its own, promptly resold its rights to Telefonica, Orange, and Vodafone. Barcelona-based Mediapro has dominated global broadcasting rights for Spain’s top soccer matches.

- Bloomberg


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