Is BT Sport's Uefa contract win a big deal?

campaignlive.co.uk, Thursday, 21 November 2013 08:00AM

When news broke of BT Sport's three-year deal to broadcast the Uefa Champions League and Europa League, there were predictable cries from pundits that the young network had "outplayed" its rivals Sky and ITV, and that the "whistle had blown" on the battle over sports rights.

 

NO Simon Davis, chief executive, Walker Media

"At 3 per cent of viewing, this is not a major blow for Sky, which will instead use the money to diversify into more drama, platforms and fibre. BT is forecast to lose £100 million annually, so it should benefit Sky in the short term.”
 

YES Alex DeGroote, media analyst, Panmure Gordon

"Sky’s iron grip on premium live sports content has truly loosened. BT Sport is clearly keen to be a serious player in live sports coverage, which means that further TV rights inflation is on the cards.”
 

MAYBE Alan Brydon, head of investment, Havas Media

"It seems as if BT is paying this £900 million over three years to stop Sky getting the contract, rather than because the company thought that the rights were worth the money for its own ends.”
 

MAYBE Robin Clarke, head of sport, Starcom MediaVest Group

"This is certainly another strong statement of intent from BT. It strengthens the offering yet again, while directly weakening Sky. However, BT still has a lot of work to do to strengthen its trading position with media agencies.”

For nearly £900 million, the challenger broadcaster has picked up the rights to screen 350 matches across both football tournaments, commencing with the 2015/16 season. The £299 million bill for each year of transmission is understood to be more than double the cost of the previous broadcast deal.

Analysts were quick to jump on the news, with Citigroup leading the charge, downgrading ITV’s share status from "buy" to neutral. In its note to investors, Citigroup described the Champions League as the "tentpole" that has traditionally brought men to ITV’s main channel, making it the "bigger casualty" of BT’s rights acquisition.

This was balanced by a view from the fellow investment house Morgan Stanley, which said the market was likely to look at this development as a "blip" in the overall story of a resurgent ITV. 

Arguably the bigger setback was to Sky, which operates in the same pay-TV arena as BT Sport, the channel that is expected to show the games from the beginning of the contract. The established broadcaster lashed out at its new rival, accusing it of paying "far in excess" of its own valuation of the rights. Sky stated it had taken a "disciplined approach" in its shared bid with terrestrial partners, and that it "would have paid more" had it deemed the contract worth the extra outlay.

BT Sport will broadcast some of its newly acquired games for free, even to non-subscription homes, presumably in an attempt to attract more subscribers via a taster of its service. Free coverage will include the finals and at least one game from all the participating British teams in the tournaments.

Questions remain about whether the Champions League really is a big concern for viewers, or is simply made out to be by ITV and Sky.

So, does this new stranglehold on live football broadcasting represent a genuine game-changer for BT Sport?

This article was first published on campaignlive.co.uk

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