BSkyB Faced Aggressive BT Challenge for English Soccer Rights (Report)
British pay TV giant BSkyB faced an even bigger challenge than previously known from telecom provider BT in the auction for the live TV rights for English Premier League soccer games, the Telegraph reported on Thursday.
BT aggressively bid for the rights to all EPL matches in an apparent effort to get as many as the maximum five game packages allowed for a single bidder, the paper said. The telecom giant shocked the industry by agreeing to pay £738 million ($1.16 billion) to show 38 matches, including more than a dozen high-profile ones, per season for the three years starting with the 2013/2014 season. But it wasn't clear if BT had offered to buy more than the two packages it ended up with.
Analysts have described the BT play for the soccer rights, long the crown jewel of BSkyB, in which Rupert Murdoch's News Corp. owns a 39 percent stake, as a major longer-term competitive challenge for the pay TV firm.
UBS analyst Polo Tang on Thursday said that news of BT's bid for a broader array of soccer matches would add to current investor concerns.
"This suggests that BT was willing to spend significantly more than £250 million ($393 million) per annum and marks an aggressive move against BSkyB," he said. "With BT being aggressive in pay TV, our concern is that BSkyB could retaliate by being even more aggressive in broadband pricing."
His conclusion: "Fundamentally, we like BSkyB (good broadband growth near-term, strong balance sheet, inexpensive), but the shares are unlikely to outperform until there is more comfort on how the competitive landscape will pan out."
BT couldn't be reached for comment. BT has said though that it plans to launch a soccer channel that it could offer via its BT Vision pay TV service, which currently only has 700,000 subscribers.
The Telegraph also reported that the BBC made a bid for a smaller package of live EPL games, but dropped out of the auction as the price tag rose.
Citing sources, the paper said that BSkyB had won only one of the seven games packages in the first round of bids, forcing it to substantially raise the prices it offered in the second round of the auction.