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ing some of the Worlds best talent. In recent years, players such as Angel Di Maria, Radamel
Falcao, Cristiano Ronaldo, James Rodriguez and Hulk have transferred from Portuguese Clubs,
(most notably FC Porto and Benfca) to the top leagues in England, Spain, France and Russia
for vast transfer sums.
Player trading has become accepted as the primary source of income for the elite Portuguese
Clubs who cannot generate the huge revenues from other traditional sources such as media
rights, sponsorship and merchandising in comparison to their counterparts in Europes elite
leagues.
However, SL Benfca, one of Portuguese footballs giants, have innovated their business model
to re-address this balance with spectacular results.
In the 2012/13 season, Benfca generated 7.5m from selling their domestic TV broadcast rights
to subscription based channel Sport TV. To put this in context, last season fellow UEFA Cham-
pions League omnipresent Arsenal, generated around 116m from centralised distribution
domestic rights. The unrivalled power of The Premier League in this space, due to unparalleled
Global interest levels in the product, is well established; nevertheless the Portuguese Club saw
huge potential to grow revenue from media rights by adopting a new approach.
The shift came at the start of last season (2013/14), when Benfca became the frst Club in
World to broadcast its own live matches when they retained the broadcast rights to their home
league games. The channel became a subscription only service and a new business model
was born. As part of this strategy, Benfca also acquired other broadcast rights including the
exclusive rights to broadcast English Premier League Football in Portugal. In doing this, Benfca
became the only Club in World football to acquire Premier League broadcast rights usually
earmarked for traditional broadcast giants such as SKY Sports, STAR Sports and NBC.
The unprecedented success of Benfca TV
and what it means for rights holders
By: Dan Haddad, Strategy & Insights
www.octagon-uk.com | T: 020 7862 0000
2 Waterhouse Square, 140 Holborn London, UK EC1N 2AE
www.octagon-uk.com | T: 020 7862 0000
2 Waterhouse Square, 140 Holborn London, UK EC1N 2AE
The value of Premier League rights for Portugal allowed this to make economic sense. The
Premier Leagues key foreign markets are outside of Europe. For instance, the value of TV rights
in Thailand is 239.6m over the current three year cycle (2013-16) while in another key growth
market, the US, the value over the same period is 188m. The value obtained by the Premier
League in European markets usually falls well below these amounts, although in certain markets
such as France (180m) and the Nordic region (also around 180m) high values are still ob-
tained. Benfca were able to obtain Premier League broadcast rights for the 2013-16 period for
the relatively paltry sum of 9m. The addition of live Premier League action to the Clubs home
matches has allowed a compelling proposition to be built for all Football fans in Portugal cre-
ating a customer base that extends beyond Benfca fans wanting to watch their Clubs games
live on TV.
The results after just one year of this strategy are highly impressive. On September 17th Benf-
ca TV announced a gross proft for the year of 28.1m, increasing revenue from broadcast by
over 250%. This will allow the Club to post an overall operating proft for the 2013/14 season of
around 14m, compared with an overall operating loss of around 9m for the previous season.
In Benfcas case, taking control over this revenue stream has been, to date, a clear success.
So what should rights holders from across the World of sports and entertainment learn from
this? The landscape is continuingly evolving and now more than ever, rights holders should
be regularly assessing their commercial strategy to stay ahead of the curve. Developments in
technology and the resulting shift in fan consumption of their passion have opened up new
opportunities for rights holders to optimise traditional revenue streams and create entirely new
ones. Those rights holders who best understand this and innovate accordingly will be those that
continue to outperform the competition.
Octagon specialise in helping rights holders navigate this landscape, identify opportunities for
growth and develop commercial strategies to deliver success. Please get in touch if you would
like to discuss Octagons services further.