Stan buy me: Optus mulls sports deal with English Premier League the drawcard
Speculation over the future of Optus Sport as a standalone subscription offering at the telco has been rife, and its key asset for a potential buyer is the English Premier League.
Speculation on the future of Optus Sport as a standalone subscription offering at the telco has been rife.
Nine Entertainment published a story a week ago indicating it could be the new home of the Premier League with Optus handing the rights to Nine’s streaming service Stan.
Industry players have confirmed to The Australian that Optus Sport was indeed seeking potential interest for a sale in the back half of 2024.
But there are conflicting reports about how committed a seller Optus is.
An Optus spokesperson confirmed to The Australian on Friday it regularly reviewed its businesses. The spokesperson declined to clarify if that meant the subscription business was for sale or if it would consider a joint venture with Nine to fold the Optus Sport app into Stan.
The key asset that a potential buyer or partner would like to get its hands on is the English Premier League. The current Optus Premier League rights deal is for six years from 2023 to 2028.
If Optus was to on-sell the rights as part of an Optus Sport divestment, it is assumed that a clause in the Premier League contract would cover transfer rights.
Optus is paying $600m for six years of the Premier League. There’s debate about the identity of the underbidder who inflated the final bids in 2021. Nine Publishing reported at the time it wasn’t Nine-owned Stan; others think it was Stan, with Paramount ANZ and Prime Video the other suspects.
Optus is calculating if it would be worth giving up on the strategy of locking in customers via the Optus Sport product. At its peak, Optus Sport is thought to have had one million customers. Those subscribers not only paid a subscription fee, many were also using Optus mobile or broadband services to secure Optus Sport at a lower cost. Some of them got a shock last year when Optus Sport increased its fees by 40 per cent for Optus customers. They had been on a good deal of just $6.99 monthly, with Optus lifting that to $9.99. The price for subscribers without an Optus phone or broadband service remained at $24.99 per month.
For Stan, there is risk involved.
At $100m a year for the Premier League, Stan would need to sell an extra 277,000 subscriptions. That assumes an average subscription price of $30 monthly for Stan plus Stan Sport and a 12-month subscription. It doesn’t factor in any lowering of churn at Stan from existing subscribers who could stay on or extend their annual spend, or an increase in the fee for Stan Sport, currently a $15 add-on.
To divest the Optus Sport service would also be a huge decision for new chief executive Stephen Rue, who only assumed the role in November 2024. The unknown for his management team is just how many of those Optus Sport customers would maintain their Optus contracts without sport, or flee Optus for a better service or more competitively priced telco or ISP.
Potential Premier League destinations
FREE-TO-AIR TV
Unlikely bidders as there are too many games (380 a season) with most of them in the middle of the night.
STAN
Premier League would be an attractive addition to the football Stan already offers – UEFA Champions, Europa and Conference Leagues.
PARAMOUNT+
Very unlikely to be able to bid at present – there is too much uncertainty about the Skydance deal to acquire parent company Paramount Global.
DAZN: Perhaps the big unknown here. Premier League would be a strong add-on to any combined Kayo/DAZN package to take to market when DAZN closes the Foxtel Group deal. DAZN currently has Premier Leagues rights for Spain, Portugal and Belgium.
NETFLIX AND APPLETV + Both have the financial muscle to take Premier League rights in a heartbeat. But they would perhaps only be interested as part of a multi-territory deal, which is not on offer. For that same reason you could probably count out Prime Video and Disney+ too.
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