Sky and BT Spend £5.136bn on Huge Premier League TV Rights Deal

The on-going war between BT and Sky over broadband and TV content took another expensive leap today after both operators splashed a record amount of cash in order to retain their hold over vital Premier League TV football rights for the 2016/17 to 2018/19 seasons.

Sky use to virtually dominant the Sports focused Pay TV market until BT launched their BTSport TV channels in 2013 and effectively broke the old mould by offering free access to their existing broadband customers. Since then BT has moved to cement their position and Sky Broadband has hit back with various discounts in order to level the playing field.

Meanwhile the national cable operator, Virgin Media, has continued to press a formal complaint with Ofcom by arguing that the current situation risked causing “significant consumer harm” from the escalating rights costs, which they say could be addressed by targeted changes to the way in which live rights are sold (here).

But if Virgin had hoped that their complaint would inject a little balance into how the Premier League manages and sells their rights, then today’s outcome will surely make for a very disappointing read and could also result in higher prices for consumers. The figures involved also dwarf the relatively meagre sums that both operators currently spend on improving their national broadband networks.

BT is to show even more football matches on their TV channels after winning exclusive live rights to 42 Premier League matches in each of the 2016/17 to 2018/19 seasons (an increase of four matches per season on the current 38). The new rights will also see BTSport show a live Saturday evening game every Premier League weekend from 2016/17 for three seasons.

The new games will be added to the 350 exclusive live matches from the UEFA Champions League and Europa League that BT Sport will be showing from both tournaments starting this summer. The BTSport channel also has live rights to the FA Cup for the next three years. Overall BT will pay £320m per season (currently £246m per season for their existing rights).

John Petter, BT Consumer CEO, said:

“I am pleased we will be showing Premier League football for a further three years and that we have secured the prime Saturday evening slot. These new rights will enhance our existing schedule of football, rugby and other international sport, including all the live footballing action from the UEFA Champions and Europa Leagues starting this summer.

BT Sport has got off to a strong start, reaching more than five million households and commercial premises, by making itself far more affordable and accessible to sports fans.”

Naturally Sky were keen to retain some control and so their deal involves the UK rights to 126 live Premier League matches a season for the same period (up from 116 under the existing contract), which includes the rights to matches on Friday evenings for the first time. This works out at about £1.392bn per year or £4.1bn of the total! Ouch.

Jeremy Darroch, Sky’s Group CEO, said:

“This is a good result and confirms that Sky is the unrivalled choice for sports fans. We went into the Premier League auction with a clear objective and are pleased to have secured the rights that we wanted.”

In both cases the deal shows that both Sky and BT are serious about retaining their places in the market, although much may now depend upon Ofcom’s current investigation. At the same time there will surely be no shortage of those who question why BT can afford to spend so much on TV content and yet at the same time claim to need state aid in order to upgrade a third or so of the UK with superfast broadband connectivity.