Well the overseas market is huge. Say what you like about the people behind this, but one thing they definitely aren't is stupid. They know full well there is a huge market for this proposal, they aren't just doing this on a whim. The price of UK rights has been going down while the price of overseas rights is going up. Those people want to see Liverpool, United, Arsenal, Chelsea etc. And obviously UK rights would take a big hit because 6 of the biggest supported clubs in the country would no longer be in the league. Fans of those clubs will be paying DAZN, they won't paying Sky to watch the PL when they aren't in it. It would be like me getting a Sky subscription to watch the Championship.
Ok got you.
Yes the upside potential for the overseas market is very much what they are gambling on here. You are probably right to say that the domestic market has reached saturation point, and obviously if you're an investor you want to see growth. So I understand that. However all I would say is that currently, or at least as of the last deal, the UK market was still 65-70% bigger than the rest of the world combined in terms of rights, so it is a bit of the old bird in the hand v 2 in the bush maxim.
The interesting gamble in this, is that the CL has very little overseas demand (relatively speaking) and actually it's value has been dropping. Now you could say it's because UEFA have done a terrible job etc, or you could say that actually a product that is played weekday nights, with the same old teams most years actually isn't a marketable as people might logically think it could be. If this goes ahead, we will certainly find out which.
My suspicion is they are gambling on the American market. This is largely untapped currently, and is the wealthiest market in the world. I had a debate with someone earlier who said about Indian's or Chinese people paying £10 pcm to watch, but thats a huge amount of money in those countries that most just won't be able to afford to pay. America though, has a massive base and as yet hasn't been captured.
Re Sky, yes if they are booted out Sky will lose a lot of subscriptions. Interestingly though, they have gone with DAZN, so Sky/BT/Amazon are incentivised to make the PL better. It's a bold move to not get one of those 3, massive coorporations on board. DAZN at present have little market coverage and huge financial challenges. They had a gamble on boxing, and it has backfired. It could be like the PL and Sky in 1992, but it's by no means automatic.
To be honest, I think the PL clubs are left with the least worst choice here. To me that is you have to kick them out, and hope the enduring appeal of the PL, as well as it's history and different storylines (title winners, top 4 race, EL qualification, relegation, promotion) ultimately wins out over a league with bigger names but ultimately only 1 of the above. It could go either way but at least they have a chance. If they let the top 6 stay, they will just win every trophy to a far greater degree than they already do.