BT limbering up for next big TV soccer auction says CEO

Reuters

By Kate Holton

BARCELONA, Nov 20 (Reuters) - Fresh from stunning its rivalsin the battle to show European Champions League soccer, Britishtelecoms group BT will be in a strong financial positionto bid for the next round of English Premier League rights, itschief executive said on Wednesday.

BT, the once-staid 168-year-old telecoms operator, saidearlier this month it had out-bid pay-TV group BSkyB andfree-to-air broadcaster ITV to show Europe's premiersoccer competition from 2015 to 2018.

The news, and the fact BT was willing to pay more thandouble the price of the previous contract, wiped more than 1.5billion pounds ($2.43 billion) off the market value of theRupert Murdoch-founded company, and showed that BT had arrivedas a proper challenger to the UK's dominant pay-TV provider.

It also focused attention on whether BSkyB, which built itsbusiness on the back of acquiring the most attractive sportsprogramming, will be able to maintain its grip on the majorityof live Premier League matches when they come up for auction.

"Because we've got this strong base in European football, onan exclusive basis it gives us that little bit moreflexibility," Chief Executive Gavin Patterson told the annualMorgan Stanley Technology, Media and Telecoms investorconference in Barcelona, when asked how he would approach thenext round of bidding for domestic rights, expected in 2015.

Ominously for rivals Patterson also noted that the group waslikely to be nearing the end of its more than 3 billion-pound($5 billion) fibre build-out programme by the time the nextauction begins.

"The business is in a much stronger financial shape, it'sgenerating a lot of cash," he said. "It's at a point where itcan afford to take choices because it will also be gettingtowards the end of the fibre roll-out."

BT currently owns the rights to show 38 live Premier Leaguematches a season, compared with the 116 games shown by thesatellite group.

BT, which spent years slashing costs and cutting staff aftertwo major profit warnings in 2008 and 2009, is offering sportsfor free to broadband customers in a bid to protect its corebusiness. Patterson said, however, that customers wanting towatch the Champions League matches would have to pay a modestsubscription.

Speaking at the same conference, the heads of BSkyB and ITVsaid they would reinvest the money they would now no longer bepaying for the mid-week European matches, and sought to playdown the effect the loss of the likes of Manchester United versus Barcelona would have on their businesses.

Jeremy Darroch, chief executive of BSkyB since December2007, said the group had broadened out in recent years tobroadcast in more than 10 million homes, offering movies,entertainment, a range of sports and a platform that enablesviewers to catch up on programming when they want.

He said Champions League programming accounted for less than3 percent of viewing on Sky Sports and said there was a limit tohow much people would pay.

He noted, however, that he would be keen to agree a mutualwholesale deal with BT, where both would carry the channels oftheir rivals on their own platforms so customers at both groupscould access the full range of live sports programming.

ITV Chief Executive Adam Crozier said the Tuesday nightChampions League game had accounted for less than 1 percent ofviewing on its channels, and although the final may draw in morethan 8 million viewers, an average Champions League gameattracts between 3.5 and 4 million viewers.

"We have factual programmes that will do those kind ofaudiences at a fraction of the cost," he said. "We would haveliked to have it, but not at any price, I'm very clear aboutthat."

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