BT limbering up for next big TV soccer auction says CEO
BARCELONA Nov 20 (Reuters) - Fresh from stunning its rivals in the battle to show European Champions League soccer, British telecoms group BT will be in a strong financial position to bid for the next round of English Premier League rights, its chief executive said on Wednesday.
BT, the once-staid 168-year-old telecoms operator, said earlier this month it had out-bid pay-TV group BSkyB and free-to-air broadcaster ITV to show Europe's premier soccer competition from 2015 to 2018.
The news, and the fact BT was willing to pay more than double the price of the previous contract, wiped more than 1.5 billion pounds ($2.43 billion) off the market value of the Rupert Murdoch-founded company, and showed that BT had arrived as a proper challenger to the UK's dominant pay-TV provider.
It also focused attention on whether BSkyB, which built its business on the back of acquiring the most attractive sports programming, will be able to maintain its grip on the majority of live Premier League matches when they come up for auction.
"Because we've got this strong base in European football, on an exclusive basis it gives us that little bit more flexibility," Chief Executive Gavin Patterson told the annual Morgan Stanley Technology, Media and Telecoms investor conference in Barcelona, when asked how he would approach the next round of bidding for domestic rights, expected in 2015.
Ominously for rivals Patterson also noted that the group was likely to be nearing the end of its more than 3 billion-pound ($5 billion) fibre build-out programme by the time the next auction begins.
"The business is in a much stronger financial shape, it's generating a lot of cash," he said. "It's at a point where it can afford to take choices because it will also be getting towards the end of the fibre roll-out."
BT currently owns the rights to show 38 live Premier League matches a season, compared with the 116 games shown by the satellite group.
BT, which spent years slashing costs and cutting staff after two major profit warnings in 2008 and 2009, is offering sports for free to broadband customers in a bid to protect its core business. Patterson said, however, that customers wanting to watch the Champions League matches would have to pay a modest subscription.
Speaking at the same conference, the heads of BSkyB and ITV said they would reinvest the money they would now no longer be paying for the mid-week European matches, and sought to play down the effect the loss of the likes of Manchester United versus Barcelona would have on their businesses.
Jeremy Darroch, chief executive of BSkyB since December 2007, said the group had broadened out in recent years to broadcast in more than 10 million homes, offering movies, entertainment, a range of sports and a platform that enables viewers to catch up on programming when they want.
He said Champions League programming accounted for less than 3 percent of viewing on Sky Sports and said there was a limit to how much people would pay.
He noted, however, that he would be keen to agree a mutual wholesale deal with BT, where both would carry the channels of their rivals on their own platforms so customers at both groups could access the full range of live sports programming.
ITV Chief Executive Adam Crozier said the Tuesday night Champions League game had accounted for less than 1 percent of viewing on its channels, and although the final may draw in more than 8 million viewers, an average Champions League game attracts between 3.5 and 4 million viewers.
"We have factual programmes that will do those kind of audiences at a fraction of the cost," he said. "We would have liked to have it, but not at any price, I'm very clear about that."