Telefónica faces €2.7bn rights bill

Telefónica faces the prospect of paying almost €2.7 billion over the next four years for the audiovisual rights to content it has acquired.

El Pais reports that the bulk of the figure (€1,153.9 million) is due this year, followed by €868.2 million in 2022, €496.7 million in 2023 and €171 million in 2024. To this amount should be added the property rights (already paid) for €1,206 million that it currently has, approximately 75% of which are for sporting events.

It must be taken into account that Telefónica signed new contracts in the middle of the pandemic to continue with the exploitation of the rights of competitions such as the NBA and the basketball ACB until the 2022/2023 season, the Formula 1 world championship until 2023 and, above all, the UEFA Champions League and UEFA Europa League until the 2023/2024 season. For the last competition alone it has had to pay €975 million, at a rate of €325 million for each of the three seasons.

El Pais notes that LaLiga plans a new distribution model in the auction of the rights for the next seasons from 2022-23. The current contract, which covers until the end of the next 2021-22 season, generated €1,105 million in revenue in the 2019-20 season, slightly less than the €1,143 million in 2018-19 due to the effect of the pandemic, to which are added €708.4 million for international rights, whose contests have other terms. The bulk of the rights of the current contract is in the hands of Telefónica, which paid €2,940 million, although it has already declared that it intends to lower the bill for national football following the example of what happened in other European leagues in Italy and France. However, LaLiga does not share that vision and has warned that it will allow streaming video platforms such as Amazon Prime, DAZN or Facebook to bid for the rights.

Telefónica will have to resolve a more urgent matter, namely the renewal of a contract with Orange so that the latter buys the broadcasting rights for LaLiga and Champions League for the 2021-22 season. Orange has asked for a reduction on the €340 million s it paid to Telefónica for the last season, arguing that the price should be set on the basis of football subscribers and not on the set of subscribers to its TV platform Orange TV.