Sky Sports didn't exactly hold back when they announced Thierry Henry as the latest addition to their long line of pundits just before Christmas.
The red carpet was rolled out for the Frenchman. Gary Neville, Jamie Carragher and Graeme Souness spoke of 'one of the greatest Premier League players ever' while welcoming their new colleague to the stable. You should know it by now, it's on TV every five minutes.
It's little wonder Sky went all out, given that the former Arsenal man is said to be raking in about £4 million-per-year from his new role. Shame then, that it might not be so long before they have to start scaling things back a little.
Sky make new Discovery
Those in the know this week are suggesting that Discovery, who last year acquired controlling stake in Eurosport, will make a move to snap up one of the seven "packages" - groups of games served up by the Premier League for auction when the rights are put out to tender.
Discovery were unavailable for comment about the possibility of bidding for the rights at the time of publication but SportBusiness International editor Matt Cutler believes it could well be on the cards. "Speak to different people and they will tell you different things," he told GiveMeSport. "The indications are that they might. Discovery is huge. they have the financial power to potentially spend over a £1 billion to acquire Premier League rights."
If it does prove to be true then they're joining an increasingly crowded market. BT Sport landed a serious blow to Sky by snatching away 38 games in the 2009 auction. Apple and Google are reportedly eyeing up the prize turkey, and Al Jazeera, who have snapped up rights for games in Africa, has not "ruled itself out" of the running for a slice of the pie in the UK market.
It's a sizeable pie too. For their share, Sky Sports paid around £2.28 billion over three years in order to broadcast 116 games live and exclusively, and they squeeze their customers as much as they can to cover that cost. Sky reported an 18% fall in pre-tax profits last year as a direct result of the battle with BT for Premier League rights. Revenue reached £3.75 billion; given the expected size of the new deal the tipping point could be close.
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Sky have around 11.5 million subscribers, of which seven million are said to pay extra for a Sky Sports package according to Sporting Intelligence. The cheapest Sky package with sports works out at £46-per-month - although much more expensive packages are available - and that means the minimum revenue generated from sports fans is over £320 million-per-year.
Of course that's just a ballpark figure. When other services such as NowTV, plus revenue from selling the rights to other providers such as Virgin are factored in, it all adds up to a high-stakes game for BSKYB, whose business model is so reliant on live football.
The bar is about to be set even higher when the Premier League puts the rights for 2016 to 2019 out to tender this year. When the current deal was negotiated, Sky and BT paid more than £3 billion, which represents a jump of 77% from the previous agreement. Reports this time round say that the final figure could well be north of £5 billion.
Sky's no longer the limit
Where Sky's dominance in football was once unchallenged there are now more than a few predators in the pool waiting to pounce and strip them of their golden goose. BT Sport landed the first blow, where the likes of Setanta and ESPN failed by spiriting away games last time, and are an even bigger threat this time round.
"The indications are that they might. Discovery is huge. they have the financial power to potentially spend over a £1 billion to acquire Premier League rights" - Matt Cutler, SportBusiness International Editor
The fact that BT have also secured the exclusive rights for the Champions League and other UEFA competitions for an eye-watering £897 million means that Sky find themselves in a vulnerable position as the cost of games increase and the amount of games they are able to show dwindles. Simply put, with the Champions League gone, they have no choice but to put all their eggs in the Premier League basket.
"Sky are starting to lose their dominance," explains Matt Cutler. "BT came in and acquired their Premier League rights in the last cycle and that was a big shock for everyone.
"People were sceptical given the history of Sky's competitors. BT bought an extra package more than Sentata did which has helped, and getting the Champions League rights was a big turning point too. That's when people started taking BT seriously."
"Without a doubt, not just sport but the Premier League is why most people subscribe to Sky. When it was set up 20 years ago it was done in an attempt to get people to subscribe to Sky Movies as well, but the movie industry developed with things like Netflix, so that fell away. It's almost Premier League or nothing."
On the horizon is another adversary hoping to further bloody the nose of Sky. In November last year it was announced by Ofcom that they would be launching an investigation into the bidding process for Premier League rights after a complaint from Virgin Media.
Their grievances appear to be valid too. Virgin - who say that they have no interest in bidding for rights but want to see a reduction in the amount their customers pay for Sky Sports - point out that UK viewers pay three times more than their European counterparts in Spain and Germany to see less games.
Only 41% of the Premier League's games were available to watch live in the UK while in Spain, Germany and Europe's other top leagues every game is on-air.
Brigitte Trafford, Virgin Media’s Chief Corporate Affairs Officer, said: “The rapidly rising cost of Premier League live broadcast rights means UK fans pay the highest prices in Europe to watch football on TV. Virgin Media has asked Ofcom to investigate how the rights are sold ahead of the next auction.”
When asked, Sky would not comment about the Ofcom investigation, which is on-going. An update is expected in March, and that means any changes will not be implemented in time to have an impact on the current tender process.
Ofcom weren't able to comment on the potential outcome of the case, but if they do rule on the side of Virgin then it's possible that the Premier League may be forced to ensure that their packages are sold to more than just two broadcasters, and not sold on an exclusive basis.
More money, more problems
Although that may have the effect of introducing more competition to the market it could leave fans in the position of potentially having to fork out for three or even more separate packages in order to see all the Premier League action.
In 2006, the Premier League agreed to change the bidding so that no one provider could buy every package, but Virgin maintain that there's not enough pressure on either Sky or BT to lower the cost for customers.
Virgin want to see more games televised too, which in theory would lower the cost because the supply is increased to meet the demand. The fact that less than half of all Premier League games are available to view on British TV is because of the Premier League's 3pm 'blackout rule'; a bone of contention for some which helps drive prices skywards.
Although there have been calls for the rule to be scrapped to bring English football in line with its European counterparts, the Football Supporters Federation believe it has to stay in order to preserve clubs lower down the pecking order.
"They can't afford to lose the rights but they can't necessarily afford to make money off the Premier League rights" - Matt Cutler, SportBusiness International editor
"It does help the unique situation we have with the pyramid of English football," David Rose, Deputy Chief Executive of the FSF told GiveMeSport. "There is a fear that if you opened up the 3 o'clock games, you may start to see a gradual erosion of attendances at the lower leagues, and attendance is the lifeblood of many clubs."
Trouble in paradise
The problem for many when it comes to understanding how the Premier League sells its rights is that it seems a shadowy and mysterious process. It's perhaps telling that on their website, the section marked "How does the Premier League sell its TV rights?" is, at the moment anyway, completely blank.
It works like this. Once tender has been issued - and the preliminary stages of the process for the upcoming three-year period from the end of the 2015/16 campaign has already begun - then buyers like Sky are invited to make blind bids in the auction. The process goes on for several weeks and is overseen by an independent observer.
The last rights?
For Sky that means the possibility of going up against any number of unseen foes which will force the bidding up further. That's exactly what happened when BT Sport entered the race and stole two of the seven match packages in 2009 for the current period; according to a report in the Telegraph, Sky were blindsided and lost out.
They won't want that to happen again and that could be bad news for their customers, who have been forced to contend with regular rising prices. BT Sport bucked the trend by offering their premium sports channels for free - although you have to subscribe to their broadband service - and as it stands Eurosport is available with Sky's 'variety bundle' which costs £28-per-month, considerably less than the Sky Sports package.
If - and it's a big if - BT maintain their 'free' approach and Eurosport keeps its current status on Sky's platform, then Sky's out-dated model looks extremely vulnerable. For now, NowTV isn't a viable alternative, but could take on a more prominent role if that does indeed happen.
End of the road?
In broadcast terms, sports footage remains the King of Kings. Demand from the public is as high as ever and that will continue to attract major players from across the globe who want a piece of the action, especially when it comes to a league with as much global popularity as the Premier League.
The fact that Sky's most popular game - Liverpool v Chelsea last season - 'only' attracted an audience of 2.7 million means there are still millions of fans in the UK who aren't watching live football who could be, and that's attracting some of the broadcasting big boys. That's bad news for Sky, who have enjoyed the luxury of being the unchallenged champion for too long.
"Basically Sky can't afford not to renew their rights," Matt Cutler continues. "With things like this it sometimes becomes a loss leader. They can't afford to lose the rights but they can't necessarily afford to make money off the Premier League rights.
"It may be the case that they have to stump up the money for the rights but is there other things they can do around it to bring in sponsors around it or something. I'm fairly sure they will have to bump up the subscription fee for Sky Sports. They can't afford to not renew the rights."
That puts them in an extremely difficult position. Having been in on the ground floor with the Premier League, Sky are now at serious risk of losing their position as the game's main player. 2015 could prove to be a defining year for Sky, one way or the other.
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