Tellynomics 42: The BBC barely hangs on in the Six Nations deal; but ITV is looking like a candidate for PL rights in the future

Well knock me down with a feather. Despite apocalyptic warnings of the risk of rights going behind the paywall, the Men’s Six Nations (M6N) rights were heroically retained by ITV and the BBC. I wrote a few weeks ago that this was likely, as a continuation of the rights being exclusive to free TV since 2002, despite a regular parade of scare stories. So no big surprise.

But I also argued that the current model is close to breaking point, with the BBC struggling to stay in the game, and the details of the deal tend to confirm this subplot. For ITV, however, top level sport appears more and more interesting and, whisper it quietly, there are enough hints here to pencil them in as a candidate for Premier League (PL) rights in the future.

The reduced BBC role

The BBC slippage in recent deals has been in the form of a gentle retreat in their share of the deal. A few cycles back, the BBC was the exclusive M6N broadcaster. ITV then came on board with matches split evenly. Then the balance shifted to ITV having the home matches to four teams while the BBC had only two (Scotland and Wales). With this split, the BBC at least had one (or perhaps even two) matches featuring England per season. But now that too has been surrendered.

The new deal sees ITV taking ten matches, including all five England matches (whether home or away). The BBC is left with five matches, all featuring one or other of Scotland or Wales. An even clearer indication of BBC slippage would be the split of the money. Sadly this has not been provided, but we can have an educated guess.

At the aggregate level, reports suggest a total fee of £63m pa, a small uplift on the previous deal. So how might this be split?

Using recent viewing figures for M6N matches as a proxy for relative value, a decent rule of thumb today is that an England match averages a bit shy of 4m viewers, while all other matches average a bit over 2m. If larger audiences are disproportionately valuable, then a 2:1 ratio between games featuring England and all others is a reasonable assumption. This suggests a 15:5 (or 3:1) split of value between ITV and the BBC, so I suspect the BBC contribution could be down to £15m pa, or even lower.

That is, admittedly, below their “fair share” of £63m, but my experience of joint bids with the BBC is they always pay less than their fair share and still expect the partner to be grateful for their presence.

Where does this story end?

What to make of the BBC’s declining contribution? A function of ongoing pressure on budgets, at £15m pa, or perhaps less, this is now a modest commitment to rugby and is more about ticking the box for “nations and regions”. When compared to the c£70m pa the BBC pays for Match of the Day rights, you can see where the sporting priorities lie. A few cycles back, when the BBC was the exclusive partner for the M6N, the amounts paid for M6N and MotD would have been roughly the same, but the paths have diverged.

The direction of travel is also clear, so I reiterate my prediction of a few weeks back that there is a high chance that this is the last deal in which the BBC will be involved. If their ability to justify spend continues to decline, there will soon be little point in ITV retaining them as a partner. ITV will be thinking about whether to own the whole thing or, if it prefers to limit its total spend, whether it looks for a new partner, which could well be a pay channel.

At the prices ITV is paying, they look like a possible candidate for Premier League rights

Much of the attention has been on this BBC retreat, but it is worth dwelling further on ITV. If the reports of the total rights fee are broadly true, it looks ITV is paying north of £45m, perhaps split £6m for each of the five England games and £3m each for the others. It is the £6m figure which is intriguing, especially when you compare it to the current price of a live PL match. In the last domestic PL deal announced in December 2023, Sky paid £1,275m pa and BT (TNT) paid £325m pa, for a total of c270 live matches between them. This is an average of £5.93m per match, now slightly less than ITV is paying for an England rugby match.

Of course, the £5.93m PL average hides a broad distribution. Underneath the average, Sky is paying much more for some of the best games, especially clashes between the big six teams. The prices of such matches are still probably out of reach for ITV, so ITV won't be showing the Manchester derby any time soon. But remove these big audience clashes from the mix, and the more run-of-the-mill PL match is therefore priced somewhat below the average. And don’t be sniffy about these other matches, they are not all Ipswich v Wolves (with apologies). Many PL games shown live feature a "glamour team" versus "someone else", and in that sense are similar to many FA Cup or League Cup selections, which seem to work perfectly well for ITV.

This suggests that, after decades of the terrestrials being assumed to be permanently out-gunned, PL matches are back into a price range that it seems ITV could afford to pay. This change reflects three developments:

• The reduced competitive intensity of PL bidding in recent cycles, after Sky and BT (TNT) stopped trying to destroy each other in 2018, and the persistent non-emergence of streaming as a replacement source of competitive intensity
• A massive expansion in the number of live PL matches sold, as the PL tries to maintain revenues in the face of reduced competition. The deal that ran from 2016 to 2019 provided for 168 live matches, but this has now risen to 270, a 60% increase. With broadly flat revenues, this has seriously diluted the average value of a live PL match, with marginal matches now being sold at very low implied prices
• For a commercial terrestrial broadcaster, the increased cost of premium drama (driven by inflation and competitive pressure from the streamers) and the persistent distinctiveness of live sport means that top level sport looks better and better value when looking at ways to secure the biggest audiences

A new approach to packaging needed?

There is, however, one problem. Even if ITV would see value in a PL match for £6m, they probably don’t want to buy 50 of them for £300m. In the last PL auction, for the period starting 2025/26, smaller packs (such as the 20 games previously bought by Amazon) were removed and the typical pack size was 50 matches or more. That’s not going to work for ITV and was more about trying to tempt a streamer to get involved, or at least make Sky and BT (TNT) worry that they might do so.

Next time the PL will have a big decision to make: do they keep chasing the dream of competitive tension emerging from the global streamers, or do they look closer to home? They could decide to turn the clock back 40 years and create a packaging structure that tempts the commercial terrestrials to return to the fray, and forces the pay TV incumbents to defend against the threat of free? That would be something to see.