BSkyB Keeps Most U.K. TV Rights for English Premier League Soccer
UPDATED: But BT beats out ESPN in the auction for live TV rights for three more years, which raised $4.70 billion.
LONDON - Long-time rights holder BSkyB has won five of seven TV rights packages for soccer games in the English Premier League, with smaller holder Walt Disney's ESPN losing out to BT, formerly known as British Telecom, for the rest.
EPL CEO Richard Scudamore announced the winners of the TV rights deals, which was expected to raise £2 billion ($3.1 billion)-plus for the league compared with the current £1.78 billion deal, in a press conference late Wednesday afternoon. He said the value of the deal exceeded expectations by rising 70 percent to £3.018 billion ($4.70 billion).
The increase, which confirms the EPL as the most valuable domestic soccer competition in the world, follows a 52 percent increase in the TV rights value that the German soccer league got in a deal with Sky Deutschland this spring.
BSkyB won the rights to 116 games, with BT winning 38. In a statement, BSkyB said it agreed to pay £760 million ($1.18 billion) per year for a total of £2.28 billion ($3.55 billion) over the three-year contract term, up from about £1.62 billion ($2.52 billion) it paid last time. While investors are likely to like the fact that BSkyB, in which Rupert Murdoch's News Corp. owns a 39 percent stake, retained the key sports rights, the price increase of about 40 percent is expected to get a negative review. Analysts had projected an increase of 20 percent-25 percent.
"This is a good result for our customers and for our business," said BSkyB CEO Jeremy Darroch. "It means that Sky Sports remains the home of Premier League football and that viewers will continue to enjoy our live and exclusive coverage until at least 2016."
He added: "Whilst the cost is higher, we have capacity for this increase through the combination of excellent work on cost efficiency across the business and choices over other future spending. As a result, we remain confident of delivering our financial plans, in line with our expectations, unchanged, in each year of the new deal."
BT's involvement surprised observers after cable operator Virgin Media pulled out of its content business a while back. But Scudamore said BT was committed to building direct customer relationships via content and was planning to launch a channel for its EPL offerings as part of its £738 million ($1.15 billion) investment over three years.
"They are a substantial British company that is at the leading edge of technology and infrastructure development," he said. "They are clearly investing in quality content to use on their platforms, and when combined with the reach and pull of Premier League football, they will deliver new ways in which fans will be able to follow the competition."
Highlighting that BT is getting its hands on 18 of 38 so-called "first pick," or high-profile, games, Scudamore said BT's play is a "game changer" that will establish it as a serious player. The telecom has "hugely ambitious plans," he added.
BT CEO Ian Livingston said: "We are pleased to have won these rights and to have secured around half of the best games on offer each season. We look forward to offering football fans real value and great quality using the latest technology.
With an investment of £2.5 billion in BT's fibre broadband, "securing Premier League rights fits naturally with this, as consumers increasingly want to buy their broadband and entertainment services from a single provider," he said.
The blind EPL rights auction had gone into a second round, with some taking that as a sign that Al-Jazeera or another bidder had joined the incumbents in the battle for the live TV rights.
The rights for the 2013/2014 British soccer season were being offered in seven packages that cover a total of 154 matches per season, up from 138 so far. A single company was allowed to only own a maximum of 116 matches or five games packages.
"We have just come off the back of a fantastic season," which was decided in dramatic fashion in the final round, highlighting the league's appeal, Scudamore said. "We went to the market at the right time."
He described the auction as " very competitive," but declined to break out bidders or how much each winner agreed to pay. ESPN bought its first Premier League games in 2009 when Setanta Sports went under. It currently holds a package of 23 games that it was looking to increase to close to 40 matches a season.
"We made a strong bid that reflected the value of the rights to our business, and we thank the Premier League for the chance to participate," ESPN said in a statement. "We’re looking forward to continuing our Premier League coverage next season, and continuing to serve fans with great live sports events and programming including the FA Cup, Europa League, Scottish Premier League, Serie A, Premiership Rugby, Top 14, golf, darts, UFC, NBA and much more.”
Scudamore said he expects ESPN to remain a great partner for the EPL overseas and bid again next time the U.K. rights come up.