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Nent not expecting further ‘material’ rights fee compensation

The Nordic Entertainment Group (Nent) has said that it is not expecting any more substantial rights fee compensation following the disruption to the sporting calendar caused by the Covid-19 pandemic.

Having already been refunded all of its rights fee for ice hockey’s cancelled 2020 IIHF World Championship, the broadcaster revealed that it has also received compensation for other events.

Speaking upon the presentation of Nent’s second-quarter results, Gabriel Catrina, the broadcaster’s chief financial officer, said: “We received compensation for some sports events that were cancelled, such as the ice hockey World Championships, some of the European football leagues and the British Open golf.”

He outlined that, “based on the current situation with the vast majority of events resuming, we do not expect any further material compensation from sports rights owners”.

The Open was cancelled for the first time since the Second World War and Royal St George’s Golf Club in Sandwich, Kent will now stage the 2021 championships instead.

Several other leading sports properties broadcast by Nent have resumed, however, including football’s Danish Superliga, the Bundesliga and the Premier League.

Catrina said that the remaining rights costs for the 2019-20 seasons of the various European football leagues that have restarted were attributed in the second-quarter results. However, costs for sports events that are resuming in the third quarter will be taken in the next set of results. This means that Nent’s sports costs will be around SEK250m (€24.3m/$28.2m) higher than anticipated in the third quarter.

The broadcaster’s sports rights sublicensing revenues also fell in the second quarter amid the raft of cancellations and postponements.

Nent was the first broadcaster to deliver a tough public stance on rights fee payments in the wake of the coronavirus crisis.

It had been set to broadcast the IIHF World Championship in both Norway and Sweden. Broadcast rights to the 2020 IIHF World Championship were sold by Infront as part of the agency’s long-term minimum guarantee deal with the International Ice Hockey Federation. However, Nent secured the sub-licensed rights in Sweden from public-service broadcaster SVT.

Leverage in rights negotiations, expansion plans

The broadcaster renewed a string of high-profile rights deals before Covid-19 took effect, headlined by the Premier League, Bundesliga and Formula 1. Anders Jensen, Nent’s president and chief executive, said that the broadcaster was using the economic effect of the pandemic to negotiate better deals with rights-holders.

He also flagged up the intention to acquire rights across additional markets as the Viaplay streaming service is rolled out across more countries.

Speaking to analysts, he said: “We’re looking at sports as a very attractive differentiator for many of the markets we’re doing our homework on. We’re using this whole [Covid-19] situation also to engage even further with our partners on the sports rights side to secure rights at favourable and attractive cost levels where we can spread our costs over more markets.

“One example is the announcement of the Baltics as part of our portfolio for Formula 1 and that was secured as part of our Nordic agreement so that’s a bolt-on and makes us the largest partner when it comes to number of territories for F1 (with eight countries covered).

“We’re looking at more deals similar to that one. We have to be clever about how we can compete. We don’t necessarily want to go head-to-head with large broadcasters in a particular market when it comes to sports. There we’ll probably look at a different kind of proposition.”

Viaplay launched in Iceland in April this year. and will be launching in Estonia, Latvia and Lithuania in the first quarter of 2021.

Viewers ‘adapt’ to empty stadiums

Nent announced yesterday (Wednesday) that second-quarter sales revenue for Viaplay fell by 4 per cent, despite paying subscribers being up by 206,000 quarter-on-quarter, and 605,000 year-on-year.

This was attributable to Nent responding to the suspension of sport in March by cutting the price the price of its sports packages. When many sports leagues and competitions resumed in June, the broadcaster reintroduced full pricing for its sports channels in Denmark, Finland and Sweden (and also resumed sports rights payments).

Nent has since increased its Viaplay subscriber targets for the year following on from a surge in interest due to the resumption of sporting events suspended due to the Covid-19 pandemic. The broadcaster saw a 10-per-cent increase in streamed minutes in June this year compared to 2019, and an 116-per-cent increase so far in July.

Jensen (pictured) said: “Sport is now back to where it was before the crisis hit hard and now we are seeing things gradually going back to normal. We are at higher levels now going into the crisis, both in terms of usage and in terms of paying subscribers to the sports packages.”

Asked about the impact on the audience of showing football matches without any fans present, Jensen claimed that Nent and the viewers had “adapted”.

He noted: “The first league we had back was the German Bundesliga and we had a lot of comments about how football without an audience is not exactly what you want in terms of viewing experience.

“But now there is new technology to add sound if you want to and we’ve seen very healthy uptake in the viewing numbers. Now people are getting used to it and the negative comments have more or less disappeared.”