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

Tuesday, February 10th, 2015 (6:13 pm) - Score 1,333
bt sport tv and broadband

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.

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Mark Jackson
By Mark Jackson
Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he also founded ISPreview in 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on Twitter, , Facebook and Linkedin.
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33 Responses
  1. Avatar No Clue

    “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.”

    Not really, there will always be those that genuinely need government benefits to survive and those that are out to just scam the system.

    The funnier thing is Sky have got an additional 10 games this year and BT only managed to get 4 more. One did it without a handouts to their group business, and the one with the handouts managed less…. Same old news, different day LOL

    • Avatar GNewton

      There are those who claim that BT Openreach need to stand on their own feet and therefore can’t serve 1/3 of the country with a commercial rollout of VDSL. This argument overlooks the fact that Openreach, like BT Sports, or BT Consumer, or BT Business, etc all have the same owner: BT Group Plc (see http://en.wikipedia.org/wiki/BT_Group#Divisions). These various entities do not act wholly independently of each other. E.g. you’d not see BT Broadband make widespread use of cheaper LLU.

      Without cross-subsidising within BT Group, it would not be able to e.g. offer free BT Sports to its Infinity customers (see http://www.productsandservices.bt.com/products/get-bt-sport-on-tv/)

      Therefore, the concerns expressed by many not to waste taxpayer’s money on BT who has clearly no need for it are valid and understandable (except for those hardcore BT trolls).

    • Avatar Steve Jones

      @Gnewton

      BT Consumer is not cross-subsidised from any other business divisions. It’s a profitable business in its own right. Indeed if it wasn’t then regulatory action would follow swiftly. BT’s competitors are always on the look-out to get Ofcom involved (witness the latest margin squeeze test on the BT Consumer FTTC products at TalkTalk’s instigation). The strategic intention of the BT Sports deal will be to make the retail product more attractive. (Also, don’t forget that BT Sports is wholesaled to some suppliers and sold to pubs, clubs and other retail customers). It is, of course, a valid question to ask if they’ve overpaid (and the same of Sky too, except even more so as their costs per game have increased even more. No doubt the City will have its say via the share price.

      You are correct that BT can make downstream purchasing decisions (so strategy can be that BT Consumer will buy from BTW rather than LLU), but the reverse isn’t true. OR’s investment strategy has to be based on its own commercial interests. It will, like any business, seek to improve returns and revenue. Hence the move into FTTC which does increase revenues to OR (incidentally, to a large extent at the expense of BT Wholesale whose ADSL/ADSL2+ service will suffer).

    • Avatar GNewton

      While it may not be open cross-subsidising, the end result is still the same. In order to offer a “free” BT Sports, the money for this must come from somewhere. As you rightly said, BT consumer does not choose other network providers for its Infinity.

  2. Avatar paul

    wish they would take there footie and rugby and stick it where the sun don’t shine

  3. Avatar Richard

    Why don’t the media companies get together and work to lower the price they pay. After all there’s only a handful of them.

    • Avatar Steve Jones

      Because that would be illegal as it would be what’s called a “buyer cartel”, which is just the opposite, but just as illegal under competition law as a “sellers cartel”.

      Just about the only thing that might be considered is a reference of the Premier League to the monopolies commissions. Theoretically, they might be considered to have significant market power and be subject to regulation. However, that’s a very difficult thing to demonstrate as, undoubtedly, they would point to competition from other sports and forms of entertainment.

    • Avatar dave

      I’m pretty sure the mobile phone networks did this hence why they paid very little for the new spectrum. It is highly illegal although we both know that corporations don’t have people sent to jail, they just pay a relatively small fine.

    • Avatar Steve Jones

      It would be a difficult thing to prove. It’s a fine line between common sentiment across the industry leading to a revaluation of new spectrum and outright collusion. It would require strong evidence for the latter as this is an issue of criminal law so has to be proved beyond reasonable doubt. (One of the reasons regulatory regimes tend to like “agreed” fines – witness what’s happened in the finance industry in the US where there have been huge fines but precious few prosecutions).

      Personally I doubt there’s been explicit collusion between the mobile phone companies over licences. One of the reasons is that several owners are seeking to pull out of direct involvement in the UK market (DT, FT, telefonica) and consolidate businesses in key markets. That makes me think the owner’s hearts weren’t in expansion, unlike the heady days of the 3G auctions when a large number of new entrants (some backed by state involvemen) were intent on grabbing market share at any cost.

  4. Avatar FibreFred

    “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.”

    Yep no shortage of people that don’t understand when you spend something you expect to get a return on the investment.

    BT could be £100bill cash rich and it wouldn’t make these hard to reach areas commercially viable.

    You don’t spend money on something you don’t expect to turn into more money, if you do your not in business for very long.

    • Avatar Steve Jones

      It’s also one of the functions of regulatory separation. Basically, Openreach has to operate at arms length from BT Consumer when it comes to investment decisions. The two have to stand and fall on their own commercial basis. In that OR investments are made in products, it must give due considerations to all customers (using normal commercial considerations of course).

      The upshot is that OR investments have to stand on their own feet (as do BT Consumer’s).

      There are a couple of ways that a BT consumer investment could adversely impact OR investments. One is that if the company over-reached itself financially, then that would impact on the ability to raise money (and the interest it would have to pay). Secondly, BT Consumer could (in theory) choose not to buy certain products from OR (or BT Wholesale for that matter). However, that is one strategic decision BT is allowed to make. That is the “upstream” organisations can have strategic decisions to buy in house. At one point it was mooted that the then BT Retail would become an LLU operator, which would have decimated the BTW ADSL operations with all sorts of knock-on issues for customers of that service.

      In any event, the City will pass judgement on this. If they are unhappy over this route, then expect to see the share price fall. (Also, people shouldn’t forget that both BT and Sky wholesale these servise and sell them to pubs, clubs and the like; expect those rates to go up).

    • Avatar No Clue

      “Yep no shortage of people that don’t understand when you spend something you expect to get a return on the investment.”

      Which is no doubt why they give BT Sport away to customers is it?

    • Avatar FibreFred

      I said no shortage of people who won’t understand, knew you’d be at the front of the queue 😉

    • Avatar AndyH

      “Which is no doubt why they give BT Sport away to customers is it?”

      Give it away or price it into their pricing?

    • Avatar No Clue

      Nope give it away, pricing for their broadband products it is included with as “free” has recently declined not increased, so the recent expenditure obviously is not priced into other products. Then again even if it were that would mean other products are cross subsidising it regardless.

    • Avatar BT Infidelity

      Its given away cos its junk, the online stream is worse quality than some amateur youtube uploads.

  5. Avatar PeterM

    So the choice for us here in West Chiltington is to keep on putting up with slow broadband at just 3.5Mbps delivered over 50 year old copper cable or to watch a load of overpaid footballers prance and roll around.
    Great!!!

    • Avatar fastman2

      or fund a new cab in your community

    • Avatar gerarda

      @fastman

      So paying twice for it – once in the council tax and once to BT

    • Avatar TheFacts

      All 8 cabs in West Chiltington have FTTC.

    • Avatar Steve Jones

      I’m assuming that as all the cabinets are enabled, this is a case of either EO lines or being too far away from the cabinet.

    • Avatar PeterM

      @TheFacts
      Yes, all 8 cabs do have FTTC but unfortunately there are lots of us on long lines who don’t get much benefit, I can only get 3.5Mbps. Some of my neighbours are beyond the reach of FTTC and get less than than 1Mbps and a few outlying properties are still on dial up. The WSCC BDUK target of a minimum of 2Mbps in the current phase will NOT be met in West Chiltington. We have already been told that we will have to wait until the next phase.

    • Avatar PeterM

      @Steve Jones
      No EO lines in West Chiltington. BT ripped out our exchange in the 1980’s and sold the land to a property developer. Before the FTTC the whole village was slow because our lines come from our relocated exchange in Storrington 2+ miles away. When they ripped out the exchange the lines were just bundled into various cabinets near a crossroads close to the location of the old exchange.

    • Avatar Steve Jones

      OK – I understand. A lot of village exchanges just became cabinets (like the one where my parents lived). A new, consolidated exchange was built to service several villages (from the architecture, it was back in the 60s when it would have been the GPO). Of course it made perfect sense, especially where exchanges were being re-equipped with new switching gear.

      Anyway, it looks like your position will only be resolved if fibre is pushed out further into the network. It’s a matter of money and priorities, and in this case, public priorities as I can’t imagine it’s cost effective on its own. I guess wireless is the only other thing that can be done. (Maybe if the mooted ADSL from the cabinet was done, it would improve things somewhat, but not to SF speeds).

    • Avatar PeterM

      @Steve Jones
      Ironically it is wireless that have given WSCC the excuse to do nothing. They claim that any improvement to our service would be classed under EU rules as overbuilding, because we have more than one supplier. The other supplier, I assume, is Kijoma who claim to cover my postcode but actually cannot provide a service for us. Kijoma are not in a position to expand their network, I understand, because they have been frozen out of West Sussex by BT and WSCC. Also no wireless operator will be interested in our postcode, anyway, because we have another fibre cabinet that serves West Chiltington old village just 500m away from us.

    • Avatar GNewton

      @TheFacts: “All 8 cabs in West Chiltington have FTTC.”

      So you do know how to use Google? Pretty amazing then, considering all your weird questions posted in ISPReview in recent months. This demonstrates you were simply too lazy to find the answers yourself to your many past questions.

      BTW.: How is your research going as regards the questions raised last summer?

    • Avatar No Clue

      PeterM you will soon find out the multi alias dumb dumb will think it knows your area and your choices better than you do. If you have not realised already.

  6. Avatar PhilB

    More misery for line rental payers

  7. Avatar adslmax

    By that time in 2016/17 line rental will go up 10% I bet it will be

  8. Avatar dragoneast

    Football and on-line gambling: a marriage made in hell; for money, not for love.

  9. Avatar Neil

    Paul – do learn to spell; not “there” dear boy it is THEIR!

    I am glad to see BT giving Sky and Murdoch a severe thrashing. I should also like to congratulate BT on its near aquision of EE Well done!

    As far as these arguments about rural broadband, BT is a private company and the universial service does not apply to broadband. If you wanted a state controlled monopoly then vote for one! Do you remember how goverments, of all colours, used telecomms income as a sourse of tax subsidy, starving the GPO of re-investment?

    Nock BT, but nock Vigin too who have no interest in rural communities and are not bound by the universal service for telephony.

    Sir Michael Rake and Gavin Patterson, I raise my hat to you both. WELL DONE!

    • Avatar No Clue

      “Paul – do learn to spell; not “there” dear boy it is THEIR!”

      Oh the irony again, new day, new name now eh? Here we go…

      “I am glad to see BT giving Sky and Murdoch a severe thrashing. I should also like to congratulate BT on its near aquision of EE Well done!”

      Try “acquisition” in that self serving dribble instead.

      “As far as these arguments about rural broadband, BT is a private company and the universial service does not apply to broadband.”

      Try “universal” instead.

      “If you wanted a state controlled monopoly then vote for one! Do you remember how goverments, of all colours, used telecomms income as a sourse of tax subsidy, starving the GPO of re-investment?”

      Oh where to start on this cluster screw up…
      1) It is “government”
      2) Try “telecoms”
      3) It is spelt “source”

      “Nock BT, but nock Vigin too who have no interest in rural communities and are not bound by the universal service for telephony.”

      1) Try “knock” instead. (Nock is an 14th century term to do with arrows)
      2) Who the heck are Vigin? Do you mean ‘Virgin’? (that is the one that gave your new Alias away. The amount of times you miss the ‘r’ out on here with various names is down right hilarity now).

      “Sir Michael Rake and Gavin Patterson, I raise my hat to you both. WELL DONE!”

      If only the same could be said about your picking on peoples language skills and then making a complete cow pat of them yourself.

      Good try, a pat on the head but you did not win your medal.

    • Avatar No Clue

      PS.. With people like this working for BT it is no wonder it is one BIG cluster F&*K

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