StarHub secures Premier League rights
- StarHub has won the broadcast rights in Singapore for the English Premier League for next 6-years.
- Singtel customers can still watch the matches due to the cross-carriage rules; StarHub to leverage its OTT and cloud gaming platform to acquire more customers.
- Maintain BUY on Singtel with TP of S$3.13 and HOLD on StarHub with TP of S$1.31.
StarHub has won the broadcast rights in Singapore for the English Premier League (PL), breaking a 12-year streak by Singtel. StarHub will be the official PL broadcaster in Singapore for the next six years, starting from the upcoming 2022-2023 season, which begins in August. Full pricing details will be revealed in June. StarHub also touted a “richer interactive user interface with features such as Party Watch, split-screen viewing (and) performance statistics. Singtel customers would be able to enjoy PL matches on Singtel platform due to the cross-carriage rules.
Considering that the season only starts in August, we don’t expect very significant impact for FY22F. StarHub claims that price alone was not the only factor in winning the deal and its over-the-top (OTT) and cloud gaming platforms also played a big role. In the past, PL was a loss leader to acquire customers and piracy was a big issue. But the technology to fight piracy has progressed a lot recently with the advent to Artificial Intelligence and OTT platforms can identify and block code sharing to increase the size of the market. It remains to be seen if StarHub’s OTT and cloud-gaming platform could help it to acquire more customers this time round.
We prefer Singtel to StarHub. Singtel offers 9% earnings CAGR over the next 2-years vs stable earnings at StarHub driven by (i) recovery in Australia and Singapore business and (ii) Associates’ growth led by sharp growth at Bharti benefiting from tariff hikes in India. Singtel is also cheaper at 18.8x 12-month forward PER vs StarHub at 22x. Singtel is trading at holding company discount of 38% based on market price of its associates.