Please wait...
Please wait...

BT Champions League win hits Sky

Shares in UK satcaster BSkyB tumbled in early Monday trading after rival BT snatched live Champions League football rights from 2015 in a £897m (US$1.4bn) deal.

The Champions League, Europe’s premier club football tournament, is currently shown live in the UK on terrestrial broadcaster ITV – which has one match a week – and by satcaster Sky.

The current three-year package cost £405m in total with Sky paying £80m a season and ITV £55m. Sky were said to have upped their bid to £500m this time round, with an extra £188m from ITV, but that has been blown out of the water by BT’s offer.

From 2015 rights for all 350 fixtures, played between the best teams from each European nation, will switch to BT Sport – launched earlier this year as the telco increasingly pushes into pay TV.

The move sent shares in BSkyB tumbling 10.7% in early trading on Monday, wiping over £1bn off the value of the company. ITV’s shares were down 3%.

Advisers Investec described the deal as a “negative/worst case scenario” for Sky and said that BT winning the first round of bidding for the rights implied that “Sky was possibly wrong-footed again” as it had been when BT previously took its rights to live Premier League football on Saturday lunchtimes.

BT shares also dropped 2% in early Monday trading, however, before rallying to a 0.51% increase at press time – signalling the high risk it has taken in paying so much for its live rights.

ITV Digital and Setanta Sports both folded after taking on Sky’s live sports monopoly in Britain, although neither paid as much for as many prestigious live rights as BT is currently doing.

On top of the new three-year exclusive deal BT has also secured rights to the secondary European competition the Europa League, which has previously been shown live by a mixture of terrestrial Channel 5 and ITV, as well as ESPN (now part of the BT channel portfolio in the UK).

It will be the first time in the history of the Champions League that no games are broadcast on free-to-air terrestrial television in the UK, though BT has promised to show select matches involving UK-based teams, and the finals of both competitions, free to non-subscribers.

More significantly it’s a blow to Sky Sports as BT continues to try and muscle in on its dominance of the UK market.

BT is using sport to try and boost its triple-play customer base – subscribers taking phone, broadband and pay TV services from the same provider – and announced its arrival on the scene in the UK last year when it agreed a three-year deal worth £246m (US$398m) a season.

That deal gives BT 38 live Premier League football games and includes 18 ‘first picks’ that will enable it to show the best game of the weekend ahead of the league’s main broadcaster, Sky Sports.

BT also paid £152m for live Rugby Union rights over three years in a controversial deal that split the sport’s main European competition.

But taking all the rights to the Champions League, a jewel in Sky’s crown that it currently promotes heavily and airs extensively on Tuesday and Wednesday evenings, is a serious statement of intent.

Gavin Patterson, BT CEO, said: “The live rights will give a major boost to BT Sport and give people yet another reason to take our terrific service.

“BT Sport has got off to a strong start with customers enjoying what we have to offer. We have attracted millions of customers by giving sport back to the fans, and we can assure people who want to catch all the action, that European football will be far more accessible and affordable with BT.”

A spokesman for Sky said: “We bid with a clear view of what the rights are worth to us. It seems BT chose to pay far in excess of our valuation.

“There are many ways in which we can invest in our service for customers. We take a disciplined approach and there is always a level at which we will choose to focus on something else. If we thought it was worth more, we’d have paid more.

“Nothing changes until 2015 and we look forward to 18 more months of live Champions League on Sky Sports. We will now redeploy resources and continue to bring customers the best choice of TV across our offering.”

This story has been updated from an earlier version.

RELATED ARTICLES

Please wait...