What SKY’s New Budget for Sport Might Look Like

Sky has 10.3 million TV customers in the UK. Collectively they pay £7,662 million in subscription revenue or on average £743.88 per year/£61.99 per month each. Currently Sky’s UK annual budget for programming (Sport & Non-Sport) is around £2,656 million per year with the rights to broadcast the Premier League, alone, accounting for £767 million or 28.9% of the entire programming budget. From next season (2016-2017) that figure jumps up to £1,392 million or 52.4% of the organization’s current entire budget for programming per year. Note the Europe wide programming budget is around £4.6 billion. In the UK, the emergence of BT Sport as a challenger to Sky has pushed up the value of TV rights.

Without an increase in the total programming budget where there used to be £1,889 million to devote to programming outside of Premiership TV rights now there will only be £1,264 million. That’s a 33% contraction. Something has to give – belt tightening will have to take place elsewhere in the programming budget.

So what is achievable with £1,264 million? Or more to the point – how much of that £1,264 million isn’t already being spent on imported TV shows or UK programming that Sky commission themselves?

Let’s start with the small matter of the cost of acquiring the rights to all of Sky’s other entertainment programming.  Channel 5 bought the rights to “Gotham” for £500,000 per episode – an indication of the buoyancy of the market in the UK for quality non-sport content.

So what do the imported shows on Sky 1, Sky Atlantic, Sky Living & Sky Arts cost? Below are some examples of the costs involved in imported premium shows from America.

  • Hawaii Five-0 £4 million a year (£166,667 per episode for 24 episodes a year)
  • Arrow £2.5 million a year
  • The Last Ship £3 million a year
  • Legends £3 million a year
  • The Flash £3 million a year
  • Zoo £4 million a year
  • Supergirl £3.5 million a year

If we were to apply the same ratio’s as existed in 2010 where 80% of the company’s programming budget was spent either on TV rights for sports or imported television shows we’d anticipate the total cost of imported shows plus TV rights for sport to be 80%*£2,656= £2,124.8 million. But we know that the cost of shows commissioned in the UK by Sky has a target of £600 million which would mean more like 77.4% being available for imported entertainment once TV rights for sports have been paid.

Cost of shows commissioned by Sky in the UK is said to total another £600 million per year. This includes the likes of:

  • A League of Their Own
  • Little Crackers
  • Trollied
  • Mount Pleasant
  • Stella
  • A Touch of Cloth
  • Moone Boy
  • John Bishop’s Only Joking
  • Yonderland
  • The Kumars
  • Duck Quacks Don’t Echo

Sky Programming Budget Break Down

TV rights for English Premiership £1,392 million

TV rights for non-Premiership Sports £2,656 million – £1,392 million – £600 million – £200 million (estimate) = £464 million

Sky commissioned UK Programming £600 million

TV Rights for Entertainment Programming £200 million (estimate) [and that’s a conservative estimate]

What is left for Sport outside of the Premiership?

So what can Sky buy in the way of non-Premiership sports rights or, in many cases, what have they already bought for this sub-budget of £464 million? Let’s start knocking off costs that are already committed to – these are all known figures where figures are knowable. Where they are not knowable they have been estimated based on historically known figures & trends.

  • ICC Cricket World Cup (through 2023); ICC Champions Trophy (through 2021) £90 million average spend per season
  • Football League – 112 live matches from the Football League including: live coverage of the Championship, League One, League Two, and exclusive live coverage of the Football League Play-Offs; Johnstones Paint Trophy – including exclusive coverage of the Johnstones Paint Trophy final live from Wembley; Capital One Cup – exclusive live coverage of the League Cup including the Capital One Cup final live from Wembley £80 million per season
  • Test Match Cricket in England and Wales (through 2019); One-day International and International Twenty20 Cricket in England and Wales (through 2019); Live coverage of all England overseas tours, plus Tests and ODIs from Australia (until 2016), South Africa (until 2020), India (until 2018) plus Sri Lanka, West Indies and New Zealand (until 2020) £70 million per season
  • Formula One All races live until 2018 £40 million per season
  • Rugby Football Union (England internationals excluding Six Nations & World Cup) £32 million per season [does not include the International TV rights which Sky also hold]
  • Rugby Super League 70 live games per season until 2016; 80 live games per season between 2017 and 2021 £32 million per season
  • Ryder Cup Live until 2018 £23 million a year
  • Live Spanish Football – over 300 live matches a season from La Liga and coverage of the Spanish Super Cup and the Copa Del Rey £18 million per season
  • The Open Championship Live on Sky Sports from 2016 £15 million a year
  • Scottish Premiership (SPL) – 25 live games a season from the Clydesdale Bank Scottish Premiership £15 million per season
  • Euro 2016 Qualifiers – live Scotland, Wales, Northern Ireland, Republic of Ireland internationals and selected other Euro 2016 qualifiers. £8 million once off
  • Major League Soccer (MLS) and MLS Cup – including live MLS Play-Offs and MLS Cup matches £7 million per season
  • U.S. Masters Live until 2017 £5 million a year
  • Elite League Speedway Live until 2019 £4 million a year
  • U.S. Open (Golf) Live until 2017 £4 million a year
  • European Tour (Golf) Live until 2018 £4 million a year
  • PGA Championship Live until 2016 £4 million a year
  • The Rugby Championship £3 million a year
  • World Golf Championships Live until 2018 £3 million a year
  • ATP World Tour Finals All matches live until 2017 £2 million per season
  • PGA Tour Live until 2022 £2 million a year
  • Dutch Eredivisie – live coverage of the Dutch Eredivisie £2 million a year
  • GP2 Live £2 million a year
  • GP3 Live £1 million a year
  • LPGA Up to 7 events live until 2016 £1 million a year
  • Scottish Open (Golf) Live until 2018 £1 million a year
  • World Snooker Shoot-Out Live £600,000 a year
  • Wales Open £300,000 a year
  • Giro d’Italia Highlights £250,000 a year
  • Deutsche Tourenwagen Masters Highlights £120,000 a year

That’s a total of £469.27 million of the £464 million already spent and we have barely scratched the surface of Sky’s non-Premiership Sports programming. There is only £-5.27 million left & a great deal of sports programming still to pay up for…

  • Rugby League Championship Live until 2021
  • Rugby League Challenge Cup One fourth round match, one fifth round match and two quarter-finals live until 2016
  • Rugby League World Club Challenge United Nations Live
  • Dubai World Cup United Live Coverage; Also on Channel 4
  • At the Races Live coverage from 29 UK courses including Ascot, Chepstow and Lingfield
  • PDC World Darts Championship Live until 2018
  • Premier League Live until 2018
  • Grand Slam of Darts Live until 2018
  • World Matchplay Live until 2018
  • World Grand Prix Live until 2018
  • SPFL – 35 live matches from the SPFL
  • Scottish FA Cup – coverage of the Scottish FA Cup including the Scottish FA Cup final
  • Coppa Italia – live coverage of the Coppa Italia including the Coppa Italia final
  • Live U16’s Victory Shield Schoolboy Football

Sky pay out £1,040 million in salaries to her 31,000 employees for a mean pay of £33,548.38 per annum or £17.47 per hour for a 40 hour/48 week work year.

The ‘crown jewels’ are a list of prestigious sporting events of national importance which may interest non-sports fans. The events are protected under the 1996 Broadcasting Act, which ensures they are shown on free-to-air television. Delayed highlights of the B-list events also have to be shown on terrestrial television.
Crown Jewels:
– Olympic Games
– World Cup and European Championship finals
– English and Scottish FA Cup finals
– The Grand National and the Derby
– Wimbledon tennis finals
– Rugby Union’s World Cup final
– Rugby League’s Challenge Cup final
– England Test matches
– Wimbledon non-finals play
– All other matches in Rugby World Cup finals
– The Open
– The Ryder Cup
– Cricket World Cup
– Commonwealth Games
– World Athletics Championships
– Six Nations matches involving home countries