December 15, 2017 / 7:23 AM / 10 months ago

BT and Sky strike deal to carry each other's channels

LONDON (Reuters) - Britain’s Sky and BT have agreed to supply their most popular channels to each other’s platforms in a deal that eases the rivalry between two pay-TV giants facing new threats from the likes of Netflix and Amazon.

FILE PHOTO: The Sky logo is seen outside of an entrance to offices and studios in west London, Britain June 29, 2017. REUTERS/Toby Melville/File Photo

In a joint statement the two companies said BT customers would be able to sign up for Sky’s NOW TV service which includes the biggest package of English Premier League matches and shows like “Game of Thrones”.

In return, BT will make its sports channels, which show Champions League soccer, 42 Premier League games a season and the current Ashes cricket series, available to Sky satellite customers.

The companies said the reciprocal deal was expected to be available from early 2019.

The two companies paid a combined 5.14 billion pounds for the last three-year Premier League rights deal, a 70 percent jump on the previous round.

The deal comes before the next set of rights, for 2019-2022, is up for grabs early next year, and the Premier League has indicated it wants companies like Amazon and Facebook to bid, saying the live packages will be available on a “technology neutral basis”.

Sky CEO Jeremy Darroch said the agreement would benefit its customers who would be able to watch all soccer matches from the Premier League, UEFA Champions League and Europa League with a single Sky TV subscription.

“UK consumers will have more ways to watch great Sky entertainment content with our leading portfolio of channels - Sky Atlantic, Sky one and Sky Living - available on all major pay-TV platforms for the first time,” he said.

FILE PHOTO: A BT company logo is pictured on the side of a convention centre in Liverpool northern England, April 9, 2016. REUTERS/Phil Noble/File Photo

BT, which launched its rival Sport TV product on the back of winning some Premier League rights for the 2013-14 season, said its customers would be able to watch Sky’s sport and entertainment programing on BT TV boxes.

“Having built up an outstanding portfolio of exclusive sports rights and a loyal base of customers, we feel that now is the right time to broaden the ways in which we distribute BT Sport,” chief executive Gavin Patterson said.

UPCOMING AUCTION

Ampere Analysis research director Richard Broughton said the BT-Sky deal was a win-win because it reduced the pressure on both to bid ever higher sums for exclusive rights.

“If you imagine a worst case scenario where Sky for instance loses access to the majority of Premier League rights and BT takes them, their subscribers would still have full access through BT Sport included in the Sky Sports bundle,” he said.

“For the upcoming Premier League rights auction there is actually a little bit of downward pressure rather than the ongoing upward inflation pressure that led to the 5 billion pounds price tag last time around.”

BT consumer brands chief executive Marc Allera said owning exclusive sports rights would remain a core part of its strategy because as well as attracting customers, it strengthened its hand when negotiating content deals with rivals.

“I believe in this marketplace it is still important to have rights,” he said in an interview, adding he wanted to win a good portfolio of games in the upcoming auction.

“It’s great content and a core part of our strategy but I’m really clear what it’s worth to us and I won’t bid above that,” he said.

Shares in BT were up 1.3 percent and Sky rose 1.7 percent.

Reporting by Kate Holton and Paul Sandle; Editing by Adrian Croft and Elaine Hardcastle

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