The Political Economy of Football V2

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 kic...

BT may sacrifice its Premier League television rights in the upcoming auction. BT's television growth has stalled in recent months, after it started charging for its sports channels. With the company facing a range of problems, the share price has lost a third of its value this year. BT has spent £3.8bn on football rights since 2012 and £1.1bn this year alone. The cost of the move into football is equivalent to 22 per cent of the BT consumer unit's entire cost growth and is no longer driving customer growth. A move away from football would be popular with some shareholders who fear that the increase in the cost of sports rights will continue to eat into BT's profit margin. BT did pay £1.2bn to retain its exclusive rights to show European football games for three more years in March and also has the rights to the FA Cup. However, it is the Premier League rights that are crucial in attracting and retaining customers. If BT bids relatively low in the auction, this coul...