The Olympic Games is the second most popular sporting event worldwide and dominant Latin American operator América Móvil has again bagged exclusive digital broadcast and pay TV rights to show the Olympics in multiple countries until 2024. América Móvil may be preparing an aggressive TV strategy as the recently rumored sale by Liberty Global of its Austrian and Swiss assets could hint at bigger investments by the Malone empire in the emerging LatAm and Caribbean regions.
A Liberty uprising would be one of the worst-case scenarios for América Móvil in the long-term, while its near-term strategy is more likely focused on increasing penetration to pull back recent pay TV subscriber losses. Also on the horizon is the future of AT&T’s video assets in Latin America, which could be sold in order to get the Time Warner deal waved through, in what a looks an increasingly likely outcome.
Liberty Global’s only Latin American market currently is Chile where it is number one in pay TV with VTR, but which could become Latin America’s joint top operator with América Móvil if it took over the whole of DirecTV’s business in the region in one fell swoop. Liberty has little satellite experience outside of its favored cable markets, yet growth there is steady, with revenue at its LiLAC Group growing from $1.2 billion in the first half of 2014, to $3.6 billion in the same period this year. In just three years, Liberty’s Latin American and Caribbean operations have gone from accounting for 6.6% of its total revenues, to 20%.
América Móvil has acquired the Olympics rights through its subsidiary AMX Contenido, for exclusive digital broadcast rights in 17 territories, plus exclusive pay TV rights in 9 countries, and non-exclusive digital and pay TV rights for the Youth Olympic Games. The deal marks what will be a ten-year consecutive deal between America Movil and the International Olympic Committee (IOC), from 2014 to 2024. Terms of the deal were not disclosed.
A recent report from Ampere Analysis found that the Olympic Games is the second most viewed sporting event on TV behind soccer, with 19% of 28,000 respondents in 14 markets saying they enjoy watching Olympics content on TV sets, not including other devices. Soccer took top spot with 28% of respondents, with the UEFA Champions League tournament also coming in as the most valued sports competition at €2 billion ($2.4 billion). If Liberty Global was to buy up additional operations in Latin America, then we would expect it to enter bidding for soccer rights and this would certainly mount an interesting challenge to América Móvil.
The Latin American pay TV market is remarkably diverse in terms of penetration, ARPU and distribution, but subscriber growth there has slowed after an extended period of growth. Currently the region has just over 74 million subscribers, with América Móvil top at 30%, followed by AT&T through DirecTV at 27% and Televisa Group third at 25%, according to data from Dataxis. The three majors have been experiencing a flat period, but signs of decline have emerged with América Móvil losing 1.3% in Q2 2017 alone and AT&T down 0.6%, while Televisa managed 0.3% growth. AT&T is suffering since the once powerful DirecTV satellite company in Latin America has come under pressure.
IOC President Thomas Bach said, “Our commercial agreements are critical for the development of sport around the world, as the IOC redistributes 90% of the revenue it generates, including across Latin America.”
Arturo Elias Ayub, América Móvil’s Director of Strategic Alliances and Contents, said, “We will continue to use innovative formats taking full advantage of technological developments to increase the awareness and interest of Latin American audiences in the Olympic Games and the Olympic values, while giving the viewer the power to choose the moment and way to follow all the action of the Games.”
Specifically, América Móvil has picked up exclusive digital broadcast rights in Argentina, Bolivia, Chile, Colombia, Costa Rica, the Dominican Republic, Ecuador, El Salvador, Guatemala, Honduras, Mexico, Nicaragua, Panama, Paraguay, Peru, Uruguay and Venezuela. It also acquired exclusive pay TV rights in Argentina, Bolivia, Chile, Colombia, Ecuador, Paraguay, Peru, Uruguay and Venezuela; non-exclusive pay TV rights in Costa Rica, the Dominican Republic, El Salvador, Guatemala, Honduras, Mexico, Nicaragua and Panama; and non-exclusive digital and pay TV rights for the Youth Olympic Games in all the above countries.