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BT closes on sports deal with DAZN

BT has amassed an enviable collection of sports rights — Premier League, Champions League, UFC — but it has proved more popular with fans than shareholders.   The executive team that led the foray into sports are long gone. Their successors have worked hard to make the business work. BT Sport was costing the company around £400m a year. After raising prices and lowering costs it is now breaking even.

BT is estimated to have racked up £2bn in operating losses on its aggressive sports foray but it is important to remember that it was playing defence as well. Rival Sky, now owned by US media giant Comcast, was offering free broadband to its sports subscribers a decade ago and eating into BT’s market share. 

BT fought back on Sky’s turf and arguably breathed life into its somewhat staid image in the process.   Yet broadcasting sport is a distraction for a telecoms company now focused on fibre and 5G upgrades. It kicked off a sale process six months ago and DAZN, the ambitious streaming company backed by billionaire Sir Leonard Blavatnik, is now in advanced talks with the telecoms company to strike a deal.

DAZN has made no secret of its desire for Premier League rights nor its admiration of BT Sport.

DAZN will need to cover the cost of running BT Sport, estimated at between £800m and £1bn a year, while growing the subscriber base beyond where BT could take it.

BT could also cut a deal with DAZN to continue to offer its subscribers access to the sports channels to avoid an exodus. Vodafone Spain learnt to its cost that backing out of football can result in mass customer walkout. In 2018 it lost 100,000 users in the space of six months after it stopped showing La Liga.

Like any good transfer saga, getting the deal over the line is complicated. Sky could still make a last-ditch tackle to stop DAZN in its tracks. Sky has a cross-licensing deal with BT and could potentially refuse to play ball. It’s not a “done deal” yet.

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