LONDON Oct 10 Pay TV company BSkyB recognises it faces serious competition in the British sports rights market from new entrant BT after dominating the landscape for the past two decades.
BT, the former telecoms monopoly, has taken a leaf out of BSkyB's book by winning a share of English Premier League soccer rights from 2013, and then buying exclusive rights to English Premiership rugby starting the same year.
BT is seeking to drive subscriptions to its BT Vision pay TV offering through its enhanced sports portfolio just as BSkyB has done to great effect. BT Vision has only around 700,000 customers, while BSkyB has more than 10 million customers.
"We take them very seriously," Sky Sports Managing Director Barney Francis told the Leaders in Football conference at Chelsea's Stamford Bridge stadium on Wednesday.
"We know the nature of the Premier League process means there has to be a competitor and competition like that keeps us on our toes," he added.
The Premier League divides its rights between two broadcasters and Francis pointed out that BSkyB would be broadcasting 116 live games per season when the new contract takes effect next season. BT will show 38 matches.
The new deal is worth more than one billion pounds a season to the 20 teams in the Premier League. BSkyB is paying 760 million pounds per year and BT will pay 246 million.
The new contract should not mean big price rises for BSkyB customers, Francis added. BSkyB is paying 40 percent more for its rights under the new contract.
"We're big enough to have financial flexibility to absorb the bulk of these costs," he said.
Francis said the loss of Premiership rugby rights was a result of inevitable belt tightening at the pay TV company after the soccer deal and should not damage its business.
"We talked about tough choices and one of those was around Premiership rugby. Premiership rugby wasn't particularly working for us and we were the junior partner," he said.
Sports broadcaster ESPN, owned by Disney, has been the biggest loser from BT's expansion into sports.
ESPN had a share of Premier League rights in Britain and was also the main broadcaster of Premiership rugby.
In a sign of growing competition, BSkyB and BT are locked in a dispute over rights to European club rugby from 2014.
BT says its deal includes the rights to matches played by English Premiership clubs in Europe, while BSkyB has signed a contract renewal with tournament organisers to show European matches.