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BT exit signals decline in Premier League TV revenues

Telecoms group BT is seeking to sell its sports broadcasting arm. That would, in effect, remove one of the Premier League’s biggest TV partners from bidding for matches in future auctions. 

The move could encompass a full disposal of BT Sport, forming a joint venture or partnership with a media business. or selling a stake in it to bring in outside investment.

Less competition between broadcasters means the value of the Premier League’s media contracts may fall in future. After two decades of near continuous revenue growth, all 20 top tier English clubs appear to be facing more straightened times.

Arguably BT has very little to show for the more than £7bn it has spent on broadcast rights over the last decade, although the initial motivation was to stop Sky taking its broadband customers.  Now the three year rotation of football rights bidding is an uncertainty on cash flow and a constant distraction for management.

Writing in the Financial Times yesterday, Bryce Elder claimed that BT had failed to show that sports rights were any better than worthless.   They were nothing more than a vanity project for Gavin Patterson, the chief executive between 2013 and 2019 (he was a Liverpool supporter).

BT revealed in 2018 that direct subscription revenue only just covered its broadcast and operational costs. Advertising. commercial and wholesale revenue fell short of the total cost of football rights packages.  BT has reduced operating costs in recent years.

The closure of pubs and clubs last March was a further setback, cutting revenue by £100m a season.   For the 2020/21 season BT reported 1.6 million direct subscribers, down from a peak of 1.9 million in 2016/17.

BT Sport could be a valuable asset for a media company looking to acquire an established presence in the UK market including studios and about 2 million customers.   The involvement in talks of Disney, Amazon and the Leonard Blavatnik start-up Dazn, as well as private equity companies, suggests there is still interest.

However, Bryce Elder comments that football looks like yesterday's background.   BT and Sky cross-broadcast each other's sports channels, having found aggregation more lucrative.


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