Amazon has a surprisingly delicate touch for an $823 billion company. The U.S. e-commerce group made its first foray into UK soccer rights, but left local players Sky and BT with most of the games. That suggests Chief Executive Jeff Bezos cares as much about scoring tactical goals as tackling rivals head-on.
Top clubs like Manchester United have been eagerly waiting for Amazon and other deep-pocketed tech groups to make a move on UK soccer rights. After a steep rise in the cost of rights at the last three-year auction in 2015, Sky and BT last year agreed to share sports channels to avoid bidding up prices further.
The two UK groups snapped up five of seven available domestic rights packages in a February auction, with Sky slashing its expenditure by 16 percent. The Premier League, which comprises England and Wales’ top 20 clubs, said on Thursday the last two packages went to BT and Amazon. Bezos’ outlay has not been disclosed, but is probably low. BT is paying just 90 million pounds over three years for the rights acquired on Thursday, compared with 885 million pounds for those it bought in February.
Though small, Amazon’s move may be a financial win. Assume it is paying the same 30 million pounds per season as BT. At that rate, Amazon could break even by adding roughly 380,000 new subscribers to its Prime service, which costs 79 pounds a year. That’s a modest 5 percent of its current UK subscriber base, using Cowen and Company estimates.
True, an aggressive move by Amazon could have delivered a decisive blow to Sky, which may soon have greater firepower given a potential acquisition by Twenty-First Century Fox or Comcast. BT is weakened after an accounting scandal last year.
But football-rights values have fallen recently in Italy and England, as pay-TV groups reassess whether high prices can ever be recouped. Now would not have been the best time for Bezos to wade in. And, by only buying the Premier League’s scraps, he’ll get a cheap way to work out the technical challenges in streaming live sports. Soccer clubs hoping for a big tech payday may have to wait a few more years.
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