SingTel wins media rights to UEFA for 2009-12

SingTel announced on 20 Mar 08 that it had been awarded exclusive media rights to the UEFA Champions League and UEFA Cup for 2009-12. These are exclusive rights across the mobile, Internet and mio TV platforms.

The UEFA Champions League is currently made available to Singapore sports fans via ESPN and STAR Sports, packaged by ESPN STAR Sports. ESPN and STAR Sports are sports channels under StarHub’s pay-TV services.

Comments
Strategically positive for mio TV but no significant bottom-line impact. We view this win as strategically important for mio TV’s long-term prospects but do not see material near-term earnings benefits for SingTel. The win should help increase takeup rates for SingTel’s mio TV which currently has around 27,000 subscribers vs. StarHub’s estimated 500,000 subscribers. However, we believe SingTel went in with a clear objective of outbidding its competitors and it remains to be seen how the win would benefit its bottom line.

Valuation and recommendation
Maintain Outperform and sum-of-the-parts target price of S$4.45. We continue to like SingTel for its highly liquid exposure to reliable earnings growth from regional associates and decent yield of 4%. Key catalysts could include news flow on its bids for Vietnamese telco assets in 2H08.

SingTel snatches slice of football telecast pie

It wins exclusive rights to screen Uefa Champions League here on mio TV, Internet

Singapore Telecommunications has muscled its way into the lucrative football pay TV market, beating ESPN Star Sports (ESS) to secure the exclusive rights to screen Uefa Champions League and Uefa Cup football matches in Singapore from next year.

The three-year deal will begin when the European football season kicks off in August 2009 all the way until the Champions League final is played in May 2012.

Under the agreement, SingTel will hold all the media rights across its mobile, Internet and mio TV platforms.

The plan is to stream the matches both ‘live’ and on-demand on its fledgling pay TV service – mio TV – and online through its IDEAS portal. Those on the go can also download clips of the games onto their mobile phones.

This is widely regarded as a major coup for SingTel, given that the Champions League is European club football’s most cherished prize. The current holders of the trophy are Italian giants AC Milan.

When contacted, an ESS spokesman said the company was ‘disappointed’ that it could not retain its rights to showcase the Uefa tournaments in Singapore past 2009.

StarHub, meanwhile, said that it did not enter the bidding for the rights, leading analysts to suggest that it was content with its existing deals that include the English Premier League (EPL) broadcast rights until 2010 and the upcoming Euro 2008 tournament in June.

Still, a StarHub spokesman described it as ‘unfortunate’ that ESS – offered as part of StarHub’s sports channels package – would not hold the rights to the two European tournaments after the current broadcast deal expires in 2009.

Yesterday’s announcement by SingTel came just a month after its chief executive for Singapore, Allen Lew, said that the telco would step up its efforts to buy more content for mio TV, which was launched last July.

Up to the quarter ending Dec 31, 2007, mio TV had just 27,000 subscribers on its books, just a fraction of the 500,000 people signed on with StarHub’s cable TV service. mio TV’s pulling power comes from being the first real challenger that rival StarHub has had on the market in recent years.

Giving his take on the deal, DMG & Partners Securities head of research Terence Wong said it was likely that this would give mio TV the boost it needed to gain a larger slice of the local pay TV pie.

‘This will garner a lot of attention, but I think football fans won’t mind paying, but it really depends on the price. But it’s definitely a big plus for SingTel,’ he told BT.

Expectedly, SingTel did not disclose the worth of the media rights, as is often the case in a competitive environment. In a statement, Mr Lew said SingTel did its research and found that sport ‘is a key genre that drives pay TV take-up’.

‘European soccer is a significant driver for people who subscribe to sport content,’ he said.

This means that football fans who want their fix of EPL and Champions League games will have to subscribe to the pay TV services of both SingTel and StarHub.

What mio TV’s on-demand service will offer, however, is to allow fans to watch the games at their convenience, instead of having to lose sleep to catch their favourite teams in action, as matches are often screened at 3am or 4am.

Next on SingTel’s football pay TV agenda is likely to be the EPL broadcast rights from 2010 onwards. Last month, Mr Lew said a renewed bid would be made once StarHub’s contract expires.

Doing so, however, is not expected to come cheap. Last year, StarHub paid an estimated $250 million to purchase exclusive EPL coverage – four times what it paid previously.

It then hiked the prices for its sports channels, which raised the ire of football fans across Singapore.