Why Amazon’s advance in European sport is unstoppable – POLITICO

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Amazon is launching a gradual takeover of European sports, seizing broadcast rights to football, tennis and other elite tournaments in a blitz that has shaken its television rivals.

The push is expected to further strengthen Amazon’s grip on European wallets and free time at a time when the tech giant already holds powerful positions in online retail and TV entertainment.

But unlike another recent unfortunate takeover – the failed attempt to create a European football Super League – Amazon’s offensive is unlikely to crash into a wall of European outrage.

This is due to a series of factors: Amazon is taking a secondary approach to its sports businesses, buying broadcast rights rather than trying to reinvent the rules of the game. In many cases, the local television players are severely weakened. by the pandemic, lack of financial means to fight against the giant of the electronic commerce with the deep pockets.

Yet perhaps Amazon’s greatest asset is the frustration of European sports fans. Scrambled between expensive membership plans and complex regional restrictions, many are taking a wait-and-see approach to the arrival of Amazon which can offer easier and cheaper access to elite sports.

“Affordability and accessibility really touch fans,” said Antonia Hagemann, CEO of SD Europe, a group of pan-European football supporters. She added, however, that the low upfront subscription costs could be offset as Amazon moved to dictate the market.

“It’s almost like a deal with the devil,” she said.

A major break came last week when Amazon announced it was purchasing the rights to the Ligue 1 football competition in France from the Professional Football League, at the expense of local broadcaster Canal + and Qatari beIN Sports – a decision that instantly crowned the Seattle-based giant. like France main football broadcaster.

This followed a series of other deals, with Amazon acquiring the broadcast rights to the NFL – the American National Football League – the English Premier League, as well as exclusive rights to certain UEFA Champions League games in Italy and certain evenings of the French Open tennis tournament. Games. Spanish La Liga, one of the most powerful football leagues in Europe, would be going change the terms of the tender for its domestic football broadcast rights auction, in order to attract companies such as Amazon to the market.

None of these deals sparked much political turmoil, unlike the Super League affair which drew criticism from French President Emmanuel Macron and British Prime Minister Boris Johnson.

In France, analysts and lawmakers told POLITICO that Macron’s office has no interest in exacerbating French football’s financial turmoil, made worse by the coronavirus pandemic, and has not decided to ban Amazon from the market. .

Regulators are also holding back their fire. As Amazon comes under scrutiny for possible violations of EU competition rules for the way it uses its merchant data to increase its own sales, regulators are finding their hands tied for the moment when it comes to limiting the movements of business in sport.

“Every time Amazon increases its presence in a related field, it sends the image of a machine that must be stopped, but it is more a political question than a competitive one,” said François Godard, senior media analyst and telecoms at Enders. Analysis.

“It’s hard to say that developing Amazon Prime Video with sports and TV shows is inherently anti-competitive,” he added.

Short of money

Amazon’s foray into sports broadcasting in France takes advantage of its TV rivals weakened due to the pandemic, a broadcaster that pledged billions of euros has had to bail out and most of France’s football leagues are in a difficult financial situation.

The French Ligue 1 is one of Europe’s top five leagues, but is poorer and less popular than its English and Spanish counterparts, and broadcast rights are one of the biggest sources of income. With the exception of Paris Saint-Germain, owned by Qatar Sports Investments, clubs in the French league lack cash and prestige. Many also survive by selling promising players, such as Nicolas Pepe and Tanguy Ndombele, at a higher price to European superclubs.

Amazon’s three-year, € 750m deal is small compared to the English Premier League, which has a four-year deal worth £ 4.8bn with Sky, BT and Amazon last month, but the tech giant’s deep pockets were greeted with open arms in France. Especially since some clubs have also contracted huge state guaranteed loans.

In addition, French football is still reeling from a crisis in December 2020, when Spanish broadcaster Mediapro in default of payment to broadcast Ligue 1 matches. Canal + intervened to broadcast the rest of the 2020/21 matches.

The French Professional Football League (LFP) again auctioned the matches and awarded Amazon 8 out of 10 French Premier League matches every week until 2024, much to the dismay of Canal +, which traditionally broadcast Ligue 1 matches. Canal + has now threatened not to broadcast the rest of the matches to which it has the rights. The broadcaster has filed a trial against the LFP, which began before Amazon entered the market but could force the League to reissue the tender if Canal + wins its call.

All of this contributed to Amazon having a relatively easy ride.

Cedric Roussel, a deputy from Emmanuel Macron’s ruling party leading an investigation into television sports rights, said: “I prefer the risk to be taken with Amazon rather than with a new entrant who does not have a solid financial base.

“However, politically, we must show the vigilance and attention that France pays to the development of sport in the country,” he added.

For longtime observers, the league bosses have favored stability over potential profit by accepting the tech giant’s offer at the expense of the two traditional broadcasters. Ronan Evain, Executive Director of Football Supporters Europe, said it was “clearly a crisis management decision on the part of the clubs”.

“They preferred the security of Amazon to the risk of Canal +,” he added.

Amazon Prime Video, Canal + and beIN Sports declined to comment for this story.

Big technology is big

In the long run, Amazon’s entry into the sports market could allow the tech giant to dictate terms with leagues and consumers by raising prices, broadcasters warn. The tech giant is also already in a better position than its TV competitors, as it is currently not under the same obligation to reinvest the money it earns in local content (this will change when a EU reform will be implemented).

In court, Canal + could argue that there is a distortion of competition, said an analyst who spoke on condition of anonymity.

“The leagues will not have much leeway if they team up with these kinds of partners. They will no longer be the ones who will define the law of the market ”, declared Grégoire Polad, who represents the television channels in Brussels.

Jeff Shulman, professor of marketing at the Foster School of Business at the University of Washington, added that the arrival of Amazon could make it difficult for its competitors.

“After Amazon’s expansion in sports, sports broadcasting will be redesigned,” Shulman said. “The downside is that competing companies will struggle and people will become more and more dependent on Amazon.”

A change could represent an improvement in the current landscape for European sports fans. In the United Kingdom, broadcasters had to retreat after initially charging £ 15 as a pay-per-view fee for Premier League games after the stadium was banned due to the coronavirus.

Amazon currently charges an annual fee of € 49 in France, but it’s unclear whether that fee will include Ligue 1 matches. The tech giant is expected to make announcements in the coming weeks.

And some football fans are nervous. “If the market is driven by Amazon, like in the US, they can do whatever they want and there is no guarantee that subscriptions will stay low,” SD Europe’s Hagemann said of the football deal. French.

No tools in the toolbox

Politicians and regulators are everywhere in Amazon’s online marketplace, warehouse working conditions, personal data handling, and tax practices.

But it’s hard to see how – in the short term – they could have a say in the company’s entry into the sports rights arena.

“We are less than a year from the presidential elections, the government’s objective is not to create a stir and rather to avoid the bankruptcy of several French clubs,” said Jean-Raymond Hugonet, a French senator who works on the regulation of sport and audiovisual. He added that the hands of national lawmakers are tied when it comes to the streaming giants, as digital and competition rules are usually managed by Brussels.

The French competition authority said last week that it “Would assess” a potential future complaint from Canal + or other operators, but added that it had not yet received one. The regulator declined to comment further.

At EU level, there are also few obvious ways for broadcasters to lodge complaints, especially since sports rights are dealt with at national level and the European Commission is reluctant to get involved in sports disputes. .

According to Tom Evens, a media economist at Ghent University who predicts that Amazon could then travel to Germany and Spain for sports rights, the tech giant’s online market remains the main area to watch because “ sport is not a goal in itself but just a means to be dominant in the sphere of electronic commerce.

Shulman, the marketing professor, said there was no direct connection between the sporting and regulatory challenges, but the real issue is how the US tech giant, which recently bought the film studio MGM, now controls the entire supply chain in several sectors.

“The bigger question is how many industries Amazon is going to own from start to finish,” he said.

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