(Updates shares, adds context)
LONDON Nov 11 Shares in Britain's dominant pay-TV operator BSkyB fell 10.2 percent on Monday as investors recoiled from the group's loss of Champions League soccer to BT, its first major defeat in a rights auction.
At 0835 GMT, shares in BSkyB were down 10.2 percent at 834 pence, wiping more than 1.5 billion pounds ($2.40 billion) off its market valuation.
Shares in BT were down 2.2 percent while ITV, Britain's biggest free-to-air commercial broadcaster, was down 3 percent on the loss of one of its most reliable draws for advertisers.
The former state telecoms monopoly BT said on Saturday it had agreed to pay nearly 900 million pounds ($1.4 billion) to show Europe's premier soccer competition for three years from 2015, after beating BSkyB and ITV in the auction.
Shares in BSkyB, 39-percent owned by Rupert Murdoch's 20th Century Fox, had been trading at a 12-year-high prior to Saturday's announcement, after strong results in October appeared to show the group withstanding the impact of BT's launch of a sports TV service.
But the loss of one of the most important sets of rights stunned investors, who had become used to BSkyB regularly outsmarting its rivals in major auctions.
Analysts said the defeat also raised the likelihood that BSkyB would have to bid very aggressively to keep its Premier League rights when that next comes up for auction.
"Our feeling is that BT's Champions League win will contribute to the de-rating already underway at Sky as the market worries about content inflation, loss of key content, new competition, the threat of (online) delivered TV and slowing broadband growth," Morgan Stanley said in a note. ($1 = 0.6252 British pounds) (Reporting by Kate Holton; editing by Keith Weir)