BT has declared war on BSkyB over Premier League rights

BT may only have won rights to 38 football games this time but its willingness to spend big money is a future threat to Sky

No one was more surprised than BSkyB to discover that the mystery bidder who forced a 70% increase in the price of UK live Premier League soccer rights was none other than BT. In the end BT only got 38 games a season – albeit plenty of good ones, with 18 first-choice picks – and Sky preserved the twin pillars of their soccer offering, Super Sundays and Monday evenings. But the fact that it now appears that BT originally bid for the whole lot – all seven packages – with board clearance, reportedly, to spend somewhere north of £2bn if necessary, represents a very clear statement of intent – one not lost on Sky.

Up to now, in TV terms, BT has been the dog that hasn’t barked. BT Vision was its big move. But most of six years and a reported £800m since launch, the broadband service has only 700,000 subscribers – nowhere near the company’s target of 3 million by 2010. And that pay-TV failure had started to threaten the longer term prospects of BT’s core fixed line broadband/telephony business.

“Triple play” (consumers taking pay-TV, telephony and broadband from the same supplier) is the holy grail and Sky’s been cleaning up – currently nearly one third of Sky’s 10 million subscribers take triple play. BT is making headway with its “infinity” fast broadband service but Sky appears to rule the roost with its portfolio of the most attractive premium content.

And had BT succeeded in taking the lion’s share of premium soccer as intended then the game, as they say, would have been well and truly changed. Instead BT faces what looks like an uphill battle against the old enemy. BT talks about using its new soccer rights to launch a new channel, offered alongside Sky Sports 1 and 2, to which BT already has regulated access thanks to Ofcom’s pay-TV review, as part of broadband packages and the much-delayed YouView internet-enhanced Freeview service, to build an alternative to Sky’s satellite-based platform.

But BT has a mountain to climb. For a start the vast majority of the TV sports fans most likely to find BT’s soccer package attractive are already Sky subscribers. So for BT there will be a trade-off. Since it is unlikely that many of those committed sports viewers would drop their Sky service at this stage, if BT wants them it will have to make its soccer available on the Sky platform. And while Sky will have to let BT in on already regulated terms, it has no obligation to share any of its customer information with its would-be competitor, meaning BT will be faced with a mammoth marketing and customer service challenge (not generally thought of as one of BT’s strongest suits), which even if it brings in subscription cash does nothing to build its own new pay-TV platform.

So the current world order in terms of UK pay-TV seems unlikely to change very much in the short to medium term but BT is a very big company with very deep pockets. And if it remains ready to spend big money – as it appears to have been at this last soccer rights auction – then at the very least it could be the most capable and effective business disrupter Sky has yet faced. © 2012 Guardian News and Media Limited or its affiliated companies. All rights reserved. | Use of this content is subject to our Terms & Conditions | More Feeds

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