Last year BT spent £729m on the right to screen 38 of the best Premier League matches from the 2013/2014 season for 3 years including first pick for 18 of the top fixtures. The majority of the BT games will comprise of fixtures at 12.45 on Saturdays, mid-week and bank holidays matches. This still leaves BSkyB with 116 games a season which is the maximum allowed for one station which cost them £2.28bn. BSkyB will have the matches on Monday nights, Sunday 1.30pm and 4pm. BSkyB has actually secured one more game per season overall for the 2013/2014 season. Overall the level of investment in the Premier League rights is £1.2bn over the amount paid by Sky and ESPN for 2010/2013.
To support the Premier League matches BT have been acquiring sporting content on an on-going basis including the rights to matches from Serie A in Italy, Ligue1 in France and Brasileirao in Brazil. In addition to this they also secured live rights for Major League Soccer games in the US. They recently announced they have also signed a four year deal with the Women’s Tennis Association. BT also signed a £152m deal to show Premiership Rugby for 4 years from 2013. It is apparent that BT plan to challenge BSkyB’s dominance of the UK pay-tv sport market as they posted very competitive bids for more of the rights packages at the earlier stages of the bidding process.
As BT’s CEO Ian Livingston, says: “BT is already investing £2.5bn in fibre broadband. Securing Premier League rights fits naturally with this, as consumers increasingly want to buy their broadband and entertainment services from a single provider.” BT believes they can succeed where both Setanta and ESPN have failed maybe due to the fact they are a bigger business with an existing, wide consumer base. Through which BT will hope to sell other goods and services, namely internet access, phone calls, mobile services and TV packages. BTs bid to become a major player in this marketplace will put pressure on BSkyB as sport content drives a significant amount of their subscription base.
Even Rupert Murdoch famously once described sport as the ‘battering ram’ for BSkyB’s pay-tv operations and the threat is that BT will use their new TV service to convert BSkyB customers. However viewing on BSkyB probably will not be hugely affected as Setanta and ESPN did not make
a big impact on viewing figures and BSkyB still has Super Sunday which is a big ratings driver. Sky Super Sunday matches achieve approximately 1,810,000 individuals and ESPN Premier League matches
reach approximately 415,000 individuals. BT are in talks with BSkyB to share the key matches which would recoup some of the rights outlay but this option would remove their ability to use the
games as an exclusive draw to BT. These initial contracts could be a tester to see the popularity and demand for the sport content which BT may build on in the future by securing more matches.
BT will be launching at least one dedicated sports channel to showcase the matches. Details are TBC but this should be launching in August. The games will be fronted by ex-BBC presenter Jake Humphrey and broadcast from the Olympic Park and the BT Tower. Claire Balding
will also present and co-produce a weekly flagship show featuring interviews and discussion with a focus on women’s sport. We will see BT Sport on BT-branded YouView boxes and BT Vision which in 2012 had 0.8m subscriber households (BSkyB 10.3m). BskyB report that 4,670,000 homes have Sky Sports 1, 2, 3 and 1,870,000 homes have ESPN. BT has said they plan to negotiate for their new channel/s to be available on as many different platforms as possible. With BT’s dominance in the telecoms/internet provider industry we can expect to see them making their content available via computer, tablet and mobile too.
The big question is who will sell the BT offering. ITV have passed on this leaving C4, Five and BSkyB in the field. BSkyB with their existing knowledge and experience of monetising the complex sport programming marketplace would be the natural fit but only if internal political issues could be resolved. BT’s sales policy will be determined by who is awarded the contract. If it goes to
BSkyB we do not expect there will be any big changes in the sport costs and at this stage there is little point speculating how C4 or Five would monetize the offering but we would still expect a minimal price change. It remains to be seen if BSkyB would roll the BT channel into their existing portfolio of sports channels or sell it individually but it will be hotly demanded in the betting marketplace. Another issue will be the Pub environment where BT might plan to market this directly to venues without BSkyB.
Mark Watson the chief executive from BT Vision “Our programme of sports broadcast rights acquisition is intended to drive revenue and deliver profits for the UK business, and sport is a great way to do this. Sport really matters to people. It arouses passion in a way that other
content can’t. It has a real impact on decision-making, because it creates an appointment to view.” BT new channel might be seen as a must have for sports fans which leaves the future of ESPNs
main channel in doubt. ESPNs Premier League content drives the majority of their subscription base so BT’s first port of call will be converting these customers to their channel. This could just be the start of BTs foray into the sport marketplace. With their size and dominance they could step up to be a real contender to BSkyB when the next bidding cycle comes round and by that point they will have the experience within the marketplace to do so. With the rumours that ESPN are to leave the UK market then the football space for next season will remain a two horse race however if other multinational corporations such as Apple, Microsoft or Google enter the bidding for the next round of rights then things could get really interesting in a couple of years time.
Tess & Ross
