Abu Dhabi Sports Channel (ADSC) head Mohammed Najib’s recent comments to a Dubai-based business tabloid that viewers will be able to watch English Premier League (EPL) games for a monthly fee “equal to the value of a KFC meal” got us reaching for the calculator (and the long-neglected KFC takeaway menu, which is missing BTW).
By our estimation, Najib’s talking in the vicinity of Dh20.00 (US$5.50) for a monthly subscription package to access ADSC’s EPL coverage, which would represent the bargain of the century compared to existing EPL rights-holder Showtime’s entry package of Dh195.00 ($53.00).
In the same interview, Najib stressed ADSC’s business plan for the EPL rights would generate solid revenues for the company in the immediate term (perhaps he’s talking about value meals for a family of 10).
So we did the maths.
ADSC’s parent Abu Dhabi Media Company reportedly secured the EPL rights for three seasons starting 2010/11 for a record US$320 million (Showtime picked up the rights for a comparatively meagre US$120m over three years).
In its first two years hosting EPL games, Showtime’s MENA subscriber base is believed to have grown by 100,000. Combine this with around $10m pa in EPL-related advertising revenues, and the $40m pa investment suddenly appears relatively good value.
But anyone will tell you that if you triple the initial outlay and sell access for the cost of a Zinger burger, you’ve got a recipe for disaster in commercial terms (no pun intended).
Let’s say ADSC sells access for around Dh240 (US$65) per annum. To make good on the $105 million or so spent on the annual rights (and taking into account the $10 million currently generated by Showtime in ad revenues), ADSC will need to attract 1,461,538 subscribers, just to break even.
A frightening prospect. Oh, and if you’re a United fan, you might want to turn your attention elsewhere. By Najib’s own admission, "Manchester City will be our favourite club in Abu Dhabi Sports Channels, because it is a story of success that every Emirati should be involved in”.
What is your impression of ADSC’s business plan for the EPL rights? HAVE YOUR SAY NOW!