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Euro 2016: Big on TV ratings, low on profits

Euro 2016: Big on TV ratings, low on profits
LOS ANGELES — Won by Cristiano Ronaldo’s Portugal on Sunday (July 10) night, and graced by the skills of Gareth Bale and Antoine Griezmann, France’s Euro 2016 soccer tourney will go down in history for
its caution-first tactics and far more entertaining crowd chants, the success of the little guys — Wales and Iceland — and the threat of terrorist attacks.
All that was new. But for the TV business, the month-long soccer saga framed a familiar paradox. Euro 2016 matches punched spectacular ratings: Yet the broadcasters who bought rights mostly lost millions; But most will be back bidding for rights to Euro 2020. Whether all of the TV networks’ appetite will be quite the same is a moot question, however.
Euro 2016 soccer match ratings have sometimes re-written the record books. Airing July 10’s Portugal-France final, M6, the No 2 French TV network notched up its biggest ratings since launching in 1987: 20.8 million viewers and a 72.9 per cent audience share. That ranks as the fourth most-watched TV transmission in French history.
More Brits tuned in to the BBC-aired Portugal-France final, which peaked at 13.6 million viewers, than to Andy Murray’s historic Wimbledon victory, which drew 13.3 million.
In Germany, marking its biggest Euro soccer audience ever, 29.8 million viewers turned on public broadcaster ZDF to catch world champions Germany lose 2-0 to France in July 7’s semi-final, resulting in an 80.6 per cent share.
Around 99.8 per cent of Iceland’s TV viewers are reckoned to have watched Iceland’s victory over Austria, 8 per cent in person in France, the remainder on TV, whether at home or on open-air TV big-screens.
“Euro 2016’s time zone was friendly for schedulers, with the majority of matches played in European evening primetime. You’d expect them to get pretty good ratings” commented Mr Tim Westcott, at IHS Technology.
Ratings could even have been better, Mr Westcott argued: June and July saw good weather. Some major national teams either did not qualify or underperformed, dropping out at a fairly early stage.
And yet, however bullish the ratings, big sports events transmissions such as Euro 2016 or the Rio Olympics are “rarely profitable for TV channels”, said Mr Jean-Baptiste Sergeant, at Paris-based stockbroker Main First Bank.
France’s M6 may be a case in point. Having bought 11 matches for around 30 million euros (S$45 million), M6 will still take a hit on its investment, Mr Sergeant said. M6 earnings margin before interest, taxation and amortisation (EBITA) will drop to 14.5 per cent in the second quarter of 2016 from 19.5 per cent over April to June last year, he predicted.
Broadcasting most big matches in the evening, when they are banned from accepting advertising, German public broadcasters ZDF and ARD cannot hope to have made back the 160 million euros they are said by German media sources to have jointly paid for Euro 2016 matches.
In the UK, commercial network ITV and the BBC simulcast many matches. “Generally, these kind of big sporting events are not profitable for broadcasters, said Ms Sarah Simon, at Berenberg, the Hamburg-based bank.
ITV acquired Euro 2016 rights “some time ago. We will have had a bit of Brexit impact. ITV will likely have made a small loss” on investment, she added.
Spain’s Mediaset Espana may break even on its Euro 2016 Uefa investment. It paid just a reported 30 million to 35 million euros for 23 matches. Though Spain took an early bath last month, losing to Italy in a last-16 knock-out match, 28 Euro 2016 matches went unsold in Spain, spiking audiences hunger for non-Spain games: Portugal-Croatia scored a 35.6 per cent share on Mediaset Espana’s Telecinco, nearly 20 percentage points above the channel average.
“In 2008 and 2012, Spain got to the Euro final but Mediaset Espana lost money, because they paid too much. This time they paid much less. So just getting half-decent returns may have been enough to get to break-even,” one analyst said.
M6, ITV, ARD, ZDF and Mediaset Espana may very well be bidding for rights to Euro 2020, however.
“Big sports events coverage can have a positive impact on free-to-air broadcasters’ image and reputation,” Mr Sergeant said.
“You’re always hearing broadcasters say that they don’t recoup on events like the Olympics and World Cup,” agreed Mr Francois Godard, at Enders Analysis. “But their calculations take in much more than direct advertising revenues. The exposure sets them apart from competitors and allows for in-house promotion,” he added.
In France, thanks in part to bullish performances from access primetime (Scenes de Menages) and primetime shows (Scorpion, NCIS and The Island). M6 increased its audience share 0.3 percentage points over January to June 2016. On a ratings rally, it is slowly closing the gap with TF1, France’s traditionally dominant free-to-air TV network. As it fights to be considered as a joint television of first choice in France, it could hardly not buy some Euro 2016 games. And with M6 also notching up its second-highest ratings ever during Euro 2016 — 17.2 million viewers and a 60 per cent share for France vs. Iceland — its losses may well have been less than imagined before the tourney began.
ITV’s airing Euro 2016 is “important to the overall cache of its brand. Also, ITV has to deliver a required share of commercial impacts, as a commitment to its advertisers. Euro 2016 is not just about the period over which it runs”, said Mr Simon.
Broadcasting Euro 2016, ARD and ZDF fulfils part of its public broadcaster brief to air programmes of interest to all Germans. National sport competitions meets that mandate, said Mr Godard.
Mediaset Espana leveraged Euro 2016 to boost its new DTT channel, the young male-skewed Be Mad which scored near 400,000 views on Sunday night for a Portugal-France post-match analysis, plus promote its fall series line-up and its big summer movie production, Juan Antonio Bayona’s A Monster Calls, with Liam Neeson and Sigourney Weaver.
Whether broadcasters will be able to maintain their traditional dominance in airing short-format sports events is another matter. “Quite a few free-to-air broadcasters are saying they simply can’t afford to increase the amounts they’re paying for these rights, since they’re not generating enough advertising,” said Mr Westcott.
Public broadcasters “are not necessarily abandoning sports altogether, just being selective in the events they invest in”, he added.
In contrast, pay TV operators are demonstrating a huge appetite for longer-running and even sometimes shorter events. In Germany, Sky will pay 80 per cent more for Bundesliga German soccer league rights over 2017-21 than under its current contract.
Outside Europe, in Mexico, Mr Carlos Slim’s America Movil will broadcast free-of-charge Rio Olympics coverage on its normally subscription-based Claro TV, a big plug for the growing pan-Latin America service. Sports remains a loss-leader. But the beneficiary is now a burgeoning pay TV, not an incumbent free-to-air giant. VARIETY.COM/REUTERS

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Chuka (Webby) Aniemeka
Chuka (Webby) Aniemeka

Chuka is an experienced certified web developer with an extensive background in computer science and 18+ years in web design &development. His previous experience ranges from redesigning existing website to solving complex technical problems with object-oriented programming. Very experienced with Microsoft SQL Server, PHP and advanced JavaScript. He loves to travel and watch movies.

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