Italy’s top football league, Lega Serie A, could face a legal battle with pay-television platform Sky Italia should the league annul Sky bids made for two packages of live rights in yesterday’s auction.
The league would also risk a rerun of the process without Sky, as the broadcaster would also consider boycotting any fresh auction for the two packages, according to informed sources.
Serie A may rerun part or all of this week’s domestic rights auction, after failing to meet reserve prices on some packages, and because some offers fell foul of bidding rules in the invitation to tender.
Sky is understood to have outbid its pay-television rival Mediaset Premium for packages A and B.
Package A comprises satellite rights plus internet and mobile rights for the home and away games of eight Serie A teams, including the top four. Package B includes the digital-terrestrial, internet and mobile rights to the same matches. All rights are for three seasons, from 2015-16 to 2017-18.
Sky fears that the bids may be annulled because package D, which contains exclusive live rights to the other 12 teams, did not produce a clear winner and may have to be resold.
The league could accept the second-highest bid for package D or conduct a new auction for it. Sky’s fear is that rather than just re-running the auction to cover unsold packages, the league will also annul the bids for packages A and B, which would allow Mediaset back into the bidding.
TV Sports Markets understands that Mediaset was the highest bidder for package D, with a bid of around €300m ($221m) per season, well above the reserve price of €235m per season.
However, Mediaset’s offer was linked to its bid for packages A and B in a way that falls foul of the rule of the invitation to tender drawn up by the league and its media adviser, the Infront Sports & Media agency, and was therefore invalid.
The three other bids for package D – from Sky, Fox Sports, and pan-European sports broadcaster Eurosport, all fell short of the reserve price.
Sky Italia and Fox Sports are both owned by Rupert Murdoch’s 21st Century Fox media group.
The league will have to re-auction package C, which contains ancillary rights such as access to the changing rooms, the tunnel and the pitch-side for interviews with players and staff, and package E, which contains live internet rights. Bids for package C did not reach the reserve price of €67m per season and no bids were received for package E, which had a reserve price of €109m per season.
If Sky is awarded packages A and B, the broadcaster would be ruled out of any new auction for package D, as no single bidder can win all rights on an exclusive basis. This is laid down in Italian law and is also a rule of the ITT.
There would also be a big question mark over Fox’s position. Although a separate company from Sky, it has the same owner. It is not clear whether the Italian antitrust authority would view the “operator” to be the individual broadcaster or their parent company. A Fox victory would almost certainly be challenged in the courts by Mediaset.
The 20 Serie A clubs will meet next week to discuss the situation. They face a huge dilemma. If they take the highest bids currently on the table for packages A, B and D, it is understood that they would earn about €970m per season. This compares with a total reserve price of the three packages of €783m per season. A fresh auction for all three, without Sky, would almost certainly bring in far less.
The decision will also have huge implications for Infront, which is owned by private equity house Bridgepoint Capital. On the basis of current bidding levels, it is well on target to hit the income level which would guarantee it three more years as the league’s media adviser, from 2018-19 to 2020-21. That could be at risk if the whole auction had to be run again. The Serie A contract is Infront’s most profitable.