Football at the heart of Latam's OTT strategies drives up rights prices

In most Latam countries, local football is the most valuable audiovisual content. In 2024, nearly $1.2 billion was paid for broadcasting licenses. Nothing is more expensive in the industry, but is it really profitable? While the price of football rights tends to rise, the number of premium subscribers has stagnated. And while several leagues are in crisis, Brazil and, to some extent, Mexico are promoting the fragmentation of rights sales: by club and, more importantly, by type of distribution: free TV, pay TV, and streaming. With limited licenses, they are collecting more money and promoting new monetization models, including those based on advertising. This multi-window system has allowed some OTT platforms to emerge as new prominent players, using football as a new element of differentiation. Amazon Prime Video is already a major player and will be the third biggest investor in rights by 2025. Local premium football: a model in crisis The sale of rights tends to increase in dollars and local currency in each negotiation round. In 2024, 5% more will be paid than in 2023. In 2025, there will be an increase of at least 1% (contracts are still to be defined). Broadcasting licenses are therefore an important source of income for clubs.  However, there is no success on the subscriber side. 8 of the 10 local leagues in the region work exclusively with subscription models. Premium football has a stagnant subscriber base. It is not growing - nor is it falling much - and although various factors are being blamed, the main leakage point is piracy via streaming. Asiet, the association that brings together telecom operators in Hispanic Latam, analyzed the types of illegal consumption in the region and highlighted the strong increase in ‘live’ options. This demand, Asiet notes, is driven by football and is concentrated in a handful of ad-supported sites, especially betting sites. In Argentina, the country at the top of illegal consumption, such traffic tripled between 2020 and 2023 and reached 11 million visits; legal football has had around two million subscribers for years. In the various markets of the region, legal strategies to block IP addresses are in place, with varying degrees of success, and are pushing search engines and marketplaces to restrict searches.  The ARPU of premium football varies from country to country but ranges from USD 5 to USD 11. And in general, they have remained stable; they have not kept pace with the price decline of traditional pay-TV.   The multi-window model Brazil and Mexico, with $627 million and $177 million respectively in 2024, are the two largest markets in terms of the value of local first-division football rights. Both are characterized by highly fragmented broadcasting licenses.  In Mexico, each...