StarHub may not negotiate for BPL rights anymore due to high costs

StarHub’s pay TV revenue of S$406m in FY11 simply can't support it.

Here's more from DBS:

SingTel has secured Barclays Premier League (BPL) rights for the 2013-16 seasons on a non-exclusive basis. SingTel does not have to share the content with StarHub as cross-carriage implies to exclusive content only.

There was no bidding for the rights (as for exclusive rights) and SingTel negotiated the price with the premier league bilaterally. This implies status quo with SingTel retaining the BPL rights.

StarHub may not negotiate for BPL rights due to the high cost in our view. Unverified industry estimates put SingTel’s bid at S$400m for the 2010-13 season and SingTel may have paid a similar amount this time as well, in our view. Clearly StarHub’s pay TV revenue of S$406m in FY11 does not support this kind of adventure.

We would be worried if StarHub secures the rights as savings of over S$20m could disappear. StarHub has benefitted an estimated S$20m annually due to the absence of EPL costs in FY10 and FY11.

Most importantly, StarHub has been able to grow its pay TV subscriber base from 541K in 2Q2010 to 543K in 2Q2012 despite the absence of EPL.