BSkyB, BT in European Rugby TV Rights Battle

2:08 AM PST 09/13/2012 by Georg Szalai

The British telecom giant's recent aggressive bidding for sports rights "is likely to put upward pressure on BSkyB's programming costs," says one analyst.

LONDON - As British pay TV giant BSkyB and telecom firm BT continue to compete for key sports TV rights, a battle over the rights to European rugby games erupted here Wednesday night.

BT announced Wednesday that it has struck a $245 million three-year deal forits BT Vision TV service to exclusively air Aviva Premiership English rugby union games starting next year. The company beat out current rights holders BSkyB and Walt Disney's ESPN.

STORY: British Telecom Giant BT Strikes $245 Million Rugby TV Rights Deal

BT said included in the deal with a British rugby governing body were the U.K. broadcast rights to popular European games of English rugby clubs starting in 2014.

That was taken as a signal that the English body was looking to stop participating in Europe's flagship rugby championship, the Heineken Cup, which features games between the best teams from the U.K., France and Italy.

European rugby body ERC late on Wednesday issued a statement, saying it "has raised questions" over the European portion of the announced BT deal, saying it "believes that any such agreement would be in breach" of a couple of established rules.

It added: "It was unanimously agreed at an ERC board meeting [in June] that ERC would conclude a new four-year agreement with Sky Sports for the U.K. and Ireland exclusive live broadcast rights to the Heineken Cup and the Amlin Challenge Cup until 2018. Premiership Rugby was party to that decision."

BSkyB in a statement also said that its Sky Sports has agreed to a new four-year deal with the ERC "for exclusive live coverage of European rugby competitions."

Said ERC CEO Derek McGrath: “Over the past 10 years, Sky Sports has made a major contribution to the development of European club rugby, and ERC is delighted to be able to extend our partnership for a further four seasons until 2018."

It wasn't clear when the dispute between the two rugby governing bodies over the right to sell TV rights would be resolved.

But UBS analyst Polo Tang said the BT deal is the latest sign that BSkyB, in which Rupert Murdoch's News Corp. owns a 39 percent stake, is facing more competition in sports rights auction.

"We estimate BT has paid a premium of up to 50 percent to obtain the rights, and the move follows BT's acquisition of 25 percent of the English Premier League [soccer] rights from 2013," he said. "We would expect BT to acquire further content for its new BT sports channel that it will launch next year, and this is likely to put upward pressure on BSkyB's programming costs."

Email: Georg.Szalai@thr.com
Twitter: @georgszalai

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