There are huge challenges facing the Premier League and its TV rights, and there will be change

Premier League dominance has been built on the value of broadcast rights, but for how long can they rely upon that?

The traditional broadcast rights package may find itself challenged in coming years (GETTY IMAGES)

The strength of the Premier League is the envy of its major competitors the world over.

As a product, the Premier League reaches a global audience, its clubs are brands in their own right and its path to dominance has been one built on that, with its popularity across the globe seeing broadcasters pay more and more each cycle to obtain the live rights.

But it is anti-Darwinian to think that these things can just go up forever. There is only so much that media companies can spend on acquiring live rights as they see their own margins squeezed.

When it emerged earlier this month that Disney were set to win an NBA media rights package the company’s stock took a 10% tumble almost immediately. It rallied, but the reaction to such a development should be instructive. Media companies are already starting to struggle to meet the kind of valuations that leagues have on the live rights. Sure, for the real heavy hitters, the likes of Sky Sports in the UK, they continue to have the financial strength, but what about the smaller broadcasters, the new kids on the block, the streaming platforms? If they start to get squeezed out of the picture and decide not to bid on rights then you have a less competitive auction, where there is less onus on the biggest players to continue to shell out more and more.

In the 2010s the landscape was pretty rosy for the Premier League. Inflation was low and the value of the rights cycles was increasing in value significantly. There was less disintermediation occurring in the industry, something that has been accelerated by technological advancements. There was also less riding on a seemingly neverending cycle of rights value increases, with wages not growing at the kind of level we have seen in recent years, where they are mostly outpacing revenue growth.