BT beats Sky to Champions League rights

Aaron Ramsey was on target for Arsenal in their Champions League clash at Borussia Dortmund.

Story highlights

  • The BT deal strikes at the heart of two decades of football broadcasting dominance by Sky
  • It is likely to raise questions about whether BT is paying too much
  • Sky was prepared to increase its payments by a greater proportion, but could not match BT
  • BT has pledged to make some games free even to those who do not have its pay TV platform

BT has achieved its biggest sporting coup yet over Sky, winning the rights to show Champions League football matches in a £900 million ($1,442 million) deal.

The deal, announced on Saturday, strikes at the heart of two decades of football broadcasting dominance by Sky.

However, it is likely to raise questions about whether BT is paying too much for sports rights, to which it has now committed nearly £2 billion ($3.2 billion).

The Champions League is Europe's football premier club competition, and BT, Sky and ITV had all hoped to secure some coverage in this week's tender.

Under a three-year agreement starting in 2015, BT will be the only broadcaster to show live Champions League and Europa League games in the UK, paying £299 million ($479 million) per season. That is more than double what Sky and ITV currently pay for the same rights, suggesting that BT bid aggressively under its new chief executive Gavin Patterson.

In the tender, ITV is thought to have bid about £63 million ($101 million) per season to show one live game per round, representing an increase of less than one-fifth on its current deal.

Sky was prepared to increase its payments by a greater proportion, but could not match BT.

    "It seems BT chose to pay far in excess of our valuation," a Sky spokesperson said in a statement. "If we thought it was worth more, we'd have paid more."

    TV is part of BT's broader strategy to win customers to its premium fibre broadband packages, which include the sports channels for free at present.

    The Champions League deal will significantly bolster its channels as serious rivals to Sky in the eyes of viewers and advertisers.

    BT's shareholders will be keen to see clear returns from such significant investments from a group that has previously focused on cutting costs and streamlining its operations.

    The group last week revealed a good start in customer numbers, with about 2m people so far having signed up to its channels although the majority would have been existing BT customers.

    However, the sports rights acquisitions weighed on earnings, and analysts say it is still too early to judge the new sports TV strategy a success.

    ITV, which was also outbid for rights to FA Cup games by the BBC, had hoped that Uefa would continue to offer some rights to terrestrial television, where advertisers can garner a larger audience.

    BT has pledged to make some games, including the Champions League final, available free even to those who do not have its pay TV platform.