Eleven Sports live-streams disruption into traditional broadcasting

Andrea Radrizzani insists he is not “the enemy”. But when it comes to the battle over sports rights — and the attention of millions of armchair fans — traditional broadcasters beg to differ.

The Italian businessman is the founder and owner of Eleven Sports, a London-based group that has gone on a €300m global spending spree to acquire rights to live-stream events on its online sports channel.

Its push to challenge more mainstream broadcasters is part of a wider disruption in the industry, as newcomers look to carve out their own niche through internet streaming and social platforms.

“It’s up to [broadcasters] if they want to be hostile,” says Mr Radrizzani. “Or if they want to work together to create value.”

Since it was founded three years ago, Eleven has launched in 11 countries in such wide-ranging locations as the US, Poland and Myanmar. Further international expansion is on the cards, with Mr Radrizzani saying the group next plans to enter Indonesia.

This year, it gained attention for its most aggressive moves yet, acquiring the rights to the Uefa Champions League, Europe’s most prestigious football tournament, in Portugal.

Eleven also launched a subscription internet channel in the UK after prising rights to Spanish La Liga matches away from British broadcaster Sky, as well as taking Italian Serie A matches previously shown on BT Sport.

According to people with knowledge of the agreement, Eleven has also signed a deal to screen the Ultimate Fighting Championship (UFC) in the UK, a move that creates another hole in BT’s dwindling sports offering.

However, Eleven should not be seen as a rival to traditional broadcasters, says Mr Radrizzani. He has approached Sky, BT and Virgin Media in the UK about offering its sports channel to their pay-TV subscribers, though he admits those companies have proved resistant so far.

“We’re not an enemy to them,” he said. “We want to work with all the platforms. It’s up to them to decide if they want to offer us as an add-on to their subscription or offer us within their sports bundle.

“Everywhere we have been, initially [broadcasters] have been very hostile to us and after three years, the relationship changes totally around.”

Eleven, nevertheless, does pose a threat to a business model that has served traditional broadcasters well.

Pay-TV groups were willing to pay huge sums for exclusive rights to sports tournaments, knowing customers would buy expensive television packages to watch their favourite games.

Eleven intends to unbundle such rights. It has done a deal with Facebook in the UK to show some of its content on the social network for free, in an effort to build audiences that can later be tempted to subscribe to its full channel. Rather than lock customers into long-term contracts, Eleven offers monthly or annual “passes” to customers who subscribe to its internet service. And in some countries, such as Poland, Belgium and Portugal, it has done deals to run Eleven as a channel through TV networks.

Some broadcasters have accused the group of inflating the value of sports rights. Last month, Marc Allera, head of BT Consumer, said his group had walked away from bidding for UFC, as well as NBA basketball — rights that Eleven Sports is also seeking to obtain — because of spiralling costs.

“It’s like a big football club in the transfer window,” said Mr Allera. “If a striker is worth £50m, I won’t pay £70m for him.”

Though Eleven has spent more than €300m over three years on sports rights, Mr Radrizzani rejected the suggestion it has overspent. He gave the example of its UK deal to screen La Liga matches, which Mr Radrizzani said was worth less than Sky paid for its previous package.

He admitted that Eleven was too small to challenge media giants for the most valuable tournaments, such as domestic rights to the English Premier League, for which Sky, BT and Amazon paid more than £4.5bn in a three-season deal earlier this year.

Mr Radrizzani, who also owns Leeds United football club, founded Eleven from the proceeds of the sale of MP & Silva — a sports rights agency that he co-founded — to Chinese investors in a deal worth more than $1bn.

Though Eleven would not provide financial details, the group remains unprofitable. It claims to have gained 2m customers for its internet service worldwide and can reach up to 17m people through deals with TV networks in some countries.

Mr Radrizzani suggested the company had an enterprise value of about €200m, extrapolating the figure from a recent deal to sell 50 per cent of its Polish business to Polsat, the Polish telecoms company, for a reported €38m.

He said growth into more markets, and buying more expensive sports rights, depended on rapidly increasing its revenues or securing new investors.

There are doubts it will succeed. One sports industry executive who works with Eleven said the company was in a race against time to build audiences fast enough to convince rights holders that they are not better served by returning to established broadcasters that guarantee more viewers.

“How do you keep the wolves from the door?” said the executive. “How do you stop rights holders going after eyeballs again to stay relevant?”

Mr Radrizzani’s response is that Eleven’s audience will grow with the number of sports it offers. “We will keep shopping to become more attractive and get a bigger customer base,” he said.