Infront on track for €1.4bn Serie A total with Coppa Italia to sell and domestic tender soon
By Martin Ross
The sale of international broadcast rights to Serie A for €371 million ($439 million) per season, with more income to be derived from the sale of rights to the Coppa Italia and Supercoppa, leaves Infront Italy, the league’s adviser, on course to meet its target of €1.4 billion per season in domestic and international rights income.
Having defeated incumbent and rival agency MP & Silva in the tender, IMG is paying the lion’s share of the international total - €4.5 million per season comes from public broadcaster Rai for the Italian communities package – and Luigi De Siervo, chief executive of Infront Italy, said that the agency remains on course to meet its target, albeit the level of domestic revenues will be shaped by the nature of competition from the telecoms sector.
Speaking to Sportcal, De Siervo expressed his confidence of exceeding €400 million annually from the international rights once deals are finalised for the Coppa Italia and Supercoppa Italiana, competitions which were previously sold separately from the Italian top flight.
Infront Italy and Lega Serie A are taking more time to consider bids for the two cup competitions.
Asked about those rights, De Siervo replied: “The result is we obtained a big result in a single country, but at the end we take more time to analyse and develop a different strategy to find many different operations to sell Coppa Italia in the next month.”
Rights to the Coppa Italia and Supercoppa Italiana competitions are currently sold by the B4 Capital agency in a contract worth €26 million per season, a huge increase on the previous agreement. The size of B4’s deal signed in 2015 raised some eyebrows in the market and was set against the background of fierce competition in the Middle East and North Africa between BeIN Sports and Abu Dhabi Media.
The Serie A international rights total will be further topped up by a deal for in-flight and in-ship rights, a package that did not attract any bids during the tender, De Siervo said, but that IMG, which operates the Sport 24 channels, is keen to land and discussions will be held in the coming weeks.
De Siervo described himself as “greatly satisfied” by the results of the international tender, on which Infront had worked for a year across its different offices, introducing international roadshows, along with packages offered specific to countries, regions or globally in order to drive interest in a property previously retained comfortably by MP & Silva.
He remarked: “In the future I think it’s possible to challenge the results of LaLiga, but for us it’s very important to recreate a real difference between us and the Bundesliga.”
De Siervo, who joined Infront Italy last year as Marco Bogarelli, an influential figure in previous Serie A tenders, moved on, added: “We’ve worked for a year [on it] since the last Sportel, working with 35 Infront offices around the world to develop a real business intelligence to understand the real value of Serie A in different markets. We developed direct relationships with many broadcasters and worked at the same time in Italy to have a very open tender.”
The value of the international rights deals from 2018-19 to 2020-21 represents a doubling of the €185 million per season paid by MP & Silva for the current cycle, albeit the €371-million annual total does include a 4-per-cent payment (of €14.5 million) to be spent on production development.
IMG is paying €340 million per season for the global media rights, along with €12 million per season for the betting rights.
A total of 30 companies worldwide lodged 95 different offers for Serie A rights ahead of the 15 September bid deadline, although no rights were awarded immediately as the league and Infront Italy held talks in order to drive up the offers on the table.
Along with IMG and MP & Silva, Mediapro, the Spanish sports agency and production company, was said to be in the mix for the global rights.
Questioned over whether the award of rights directly in China had been considered, particularly given interest from the likes of Suning, the Chinese electronics retailer that operates the PPTV online streaming service and owns top club Inter Milan, De Siervo was adamant that the Chinese government’s curbs on sports spending had had an effect.
He said: “The direct offers made from PPTV, Tencent and others in the Chinese market were under value. For this reason our result is very interesting because at the moment we don’t have a big value in China.”
The government spending controls came into effect after PPTV’s $50-million-per-year rights deal with the German Bundesliga earlier this year, according to the Infront Italy chief.
Infront Italy did try and carve out a package of rights in the MENA region in order to have a direct deal with a broadcaster there, De Siervo said, but “in the end, the sum was bigger from the global offer.”
One aspect seen as an important differentiator in IMG’s bid was its commitment to production, although De Siervo was coy about whether the incoming international rights-holder could have a role in handling production, adding that there is “an opportunity” for Infront to “propose” HBS, its host broadcasting subsidiary.
He remarked: “We are ready to improve our product and if IMG has different suggestions then we are able to take them.”
Domestic tender looms Infront is keen to close the international rights sales process swiftly so that it can turn its attention to re-launching the domestic rights auction in Italy by the end of November.
In May, Lega Serie A and Infront put five main packages up for sale with a combined reserve price of €1 billion per season, but attracted financial offers from only pay-TV’s Sky Italia and Perform, the digital sports content and media group.
That process was duly scrapped amid an antitrust protest from Mediaset, but market conditions are now improving, with the commercial broadcaster signalling its intention to bid in a new auction and Vivendi, the media group, said to be offering compensation to end an ongoing legal battle with Mediaset.
Telecom Italia, the Italian telecoms group, has also teamed up with the Vivendi-owned Canal Plus to launch a joint venture targeting sports rights, leaving De Siervo more confident about the sale of domestic rights from 2018-19 to 2020-21.
Infront Italy is finalising the structure of the new invitation to tender, but has been waiting for Telecom Italia to finalise its strategy.
The appointment of a new chief executive at Telecom Italia (Amos Genish, previously of Vivendi) and the forthcoming appointment of a new chief at the Italian league has meant a delay in the rights sales process.
Mediaset Premium and pay-TV rival Sky Italia currently pay a combined €943 million per season for the live pay-TV rights to Serie A following an auction held early in 2014, which left the likes of Fox and Eurosport empty-handed.
On the previous lack of competition in the Italian market, De Siervo surmised: “The telecoms [sector] is very important for our future.
“Telecom Italia didn’t make the same decision as BT [to invest in sports rights] in the UK and we don’t have competition in the over-the-top business. Plus Mediaset has a small budget for the future. They lost money in the last three years and the rights to the Uefa Champions League [from 2018-19]. They’ve lost customers so it’s been very complicated to finalise the tender. To obtain €1 billion [per season] is our target for the Italian market.”
He added: “The Italian market is very complicated because we have only one partner in DTH [Sky Italia] and only one potential partner in DTT [Mediaset Premium], and we don’t have any partners for over the top.
“Our target is very clear. We declared the target a year ago of €1.4 billion [per season from domestic and international rights]. We need to finalise the new structure of the domestic tender, but only after the telecoms transformation because they changed a lot in the last two months.”
Infront’s six-year, €5.94-billion minimum guarantee agreement with Lega Serie A to operate as its exclusive adviser on both domestic and international rights media rights sales runs until the end of the 2020-21 season.
Asked about any potential continuation of that relationship, De Siervo said Infront would discuss that with the new league chief executive at the end of the domestic rights sales process.