Sky makes £5bn bet on its future in sports battle for the UK’s living room

Sky will aim to capitalise on its biggest investment in sport in over 30 years with plans to show as many as 1,200 football matches a year, and more funding for innovative in-game coverage.

The UK-headquartered group is hoping that sports will be a key differentiator in the fight — not just against other broadcasters but also against the large US tech giants — to be the primary entertainment subscription for British homes.

Days after securing the rights to show the majority of Premier League football matches for more than £5bn, Dana Strong, the chief executive of Comcast-owned Sky, said that the deal capped a multiyear bet by Sky on cornering the market for exclusive sports coverage.

“It is a big deal for Sky,” she said in an interview with the Financial Times. “We’ve got the lion’s share of every major sport that UK fans crave until the end of the decade. That gives us an enormous runway to think about how we invest in innovation.”

Sky first acquired the rights to broadcast Premier League matches in 1992.

The new £5bn deal will increase the number of games shown every season from the top tier of English football to 215; an increase of 70 per cent on the former arrangement struck in 2021. A separate £935mn agreement with the English Football League will mean that Sky can show more than 1,000 games a season across its divisions. 

Now, the media and telecoms group is putting in place long-term investment plans to make sense of the vast outlay on rights to show the Premier League games for the next four years. 

Sky is looking to show multiple games at the same time via its streaming platform, while also broadcasting a show of match highlights.

“We could play it out on streaming, we could play it out in an app, you play it out on linear channels. So there’s lots of different ways that we can bring it live for customers,” she said.

Other technology and initiatives will bring viewers closer to the action, according to Strong. There are continuing talks about securing greater access to players and managers around the games.

Part of the Sky strategy is to encourage greater viewing among women and younger people. 

Sky is aiming to “make sure that sport is something that’s embraced by every member of the family, not just the dad”, according to Strong. “It’s really important for sport as a business to make sure that we’re bringing the under-35s because if you’re not then you’re damaging the legacy.”

Sky Sports, the group’s main UK rights holder, reported a 40 per cent increase in viewers for its coverage of the opening weekend of football compared with 2022-2023. More than 8mn fans tuned into the five games on Sky Sports, including 2.5mn under-35s.

Claire Enders, a media analyst, said that the Premier League deal will help to guarantee Sky’s future by removing a risk to its TV subscription base, even as the cost of living crisis is hitting the mobile and broadband market.

The group has also held talks with clubs about getting greater access to managers and players during the match, although Strong said that the dressing room at half time was still the “sacred ground for managers”. 

“We’re getting closer to the managers, closer to the players, representing their voices, even if it’s not at halftime. We’re working hard to build their trust.”

Success in the Premier League auction will mean new customers but also a greater chance to increase subscription prices, according to analysts at Enders. Strong declined to comment on whether there would be higher costs for consumers. 

The move to show more games over its streaming services reflects a broader strategy taking the broadcaster away from providing TV through a traditional Sky satellite dish — where it literally made its name — to being a digital media group.

“It’s a really important pivot for our business . . . the next frontier. And we’ve been pretty bold about leaving the satellite behind,” Strong said.

More than three-quarters of customers sign up to internet-delivered services rather than traditional satellite dish. 

Underpinning this strategy has been the launch of Sky Glass, an internet enabled TV set that comes with a subscription to its channels.

Comcast has had to write down the value of Sky in its books since acquiring the business in 2018 for £32bn as the result of higher interest rates and reduced estimated future cash flows. Some media analysts also view the price paid as excessive for a business facing competition from both US tech groups as well as domestic telecoms and broadcast rivals. 

Strong said the writedown “was based on a number of factors, including interest rates, foreign exchange, macro economic climate. None of those factors were in a very healthy place. We feel that moment is in the rear-view mirror. The US parent feels optimistic about the Sky business, and we’re in good shape.”

More importantly, she said, Sky’s investment in technology also benefits Comcast, which has used its innovations to help create a global entertainment platform. Sky also now sells its platform technology to other TV providers in regions such as Africa, creating a further revenue stream.

Enders said that under Strong’s three-year tenure, the broadcaster had been able to bring its US parent “on board with Sky’s objectives” — including signing the cheque for more than £5bn for the rights.

Away from sports, Sky also faces a crucial renegotiation with Warner Brothers Discovery over extending its deal to show HBO programming beyond 2025. Since the deal was struck, WBD has launched its own streaming platform, Max, which could lead to a rethink of its UK strategy with Sky. 

Strong said that there was “plenty of time” to arrive at a new deal but admitted that there were already talks about the future. “As you would expect In any good relationship, you’re always revisiting. How can we improve the relationship? What might the next generation look like?”

Sky will also invest more than £500mn a year in original content for its TV channels, in part using new studios in Elstree for production.

The studios opened officially in September although have already been used on the production of the new Wicked movie, which was held up by the strikes in Hollywood. More blockbusters are set to follow, including the Paddington franchise movies.

Strong said: “We believe there’ll be about 3 billion [pounds’] worth of movie productions over a five-year period. And which should bring about 2,000 jobs to the UK”.