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Television rights market starts to cool

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The football television rights market may have reached its peak, at least domestically, although overseas deals could continue to contribute increasing revenues, making up a growing share of the total.

An underlying driver is that fans are starting to watch football in a different way.   The market is starting to fragment with less commitment to watching the whole game.   Younger fans in particular are watching on their mobiles in shorter bursts.

If one just sees a few highlights, one can get a completely different impression of a game.  For example, in the recent England v. Scotland international, just watching the England goals would have given the impression that they were totally dominant, but over the game as a whole Scotland pressed them hard.

A wave of inflation was triggered in 2013 when BT bid £900m for the exclusive rights to Champions League and Europa League football in the UK.   This had led to expectations that Sky might fight back hard to regain Champions League rights in Britain in an auction due in the coming months.

However, Jeremy Darroch, chief executive of Sky, told a recent conference in Barcelona that the higher costs of sports and media rights meant that telecoms and media companies were having to make 'harder choices'.  He said, 'We'll seek to win, but we're also happy to let things go.'

Whereas Sky used to derive 90 per cent of their income from sports and movies, that figure had drifted down to 50 per cent.  'Sport is important.   Football is very important, but every day it is less important,' Mr Darroch said.

Gavin Pearson, chief executive of BT, also said that there was a limit to what they were prepared to pay. 'European football has been a great driver for us.  It's worked well and brought in new customers and a paying-for audience which is what we wanted.   If the price becomes too rich, we will have to walk away.'