BT trumps Sky to show Champions League matches

Reuters

By Kate Holton and Stephen Addison

LONDON, Nov 9 (Reuters) - Britain's BT has beatenBSkyB to win the right to show Champions League soccerfrom 2015, in the biggest blow to Rupert Murdoch's dominantpay-TV operator since it started broadcasting more than 20 yearsago.

BT, the 168-year-old former state telecoms monopoly, said itwould pay 299 million pounds ($478 million) a season to add theglamour ties of Barcelona versus Manchester United and RealMadrid versus Bayern Munich to the English Premier Leaguematches it already shows.

The deal means BT will replace BSkyB and Britain's biggestfree-to-air commercial channel, ITV, as the soleprovider of Champions League matches on Tuesday and Wednesdaynights. BT will also show the UEFA Europa League for threeyears, Europe's second-tier soccer competition.

"The live rights will give a major boost to BT Sport andgive people yet another reason to take our terrific service,"Gavin Patterson, BT chief executive since September, said. "BTSport has got off to a strong start with customers enjoying whatwe have to offer."

BT, which said it would show a selection of the matches forfree, said the contract would not affect its financial targets.

The group, which had spent years slashing costs after twomajor profit warnings in 2008 and 2009, stunned the sportingworld in 2012 when it won the rights to show 38 live PremierLeague matches a season.

While the new entrant to the market remained a minnow incomparison to BSkyB and its 116 games, the move was an earlyindication of how BT was willing to spend big to protect itscore broadband and fibre services by combining it with an offerof high-quality sports programming.

With annual revenues of more than 18 billion pounds, BT wasalso in a completely different league to the two previous groupsthat had tried to challenge BSkyB in the British homeentertainment market - Ireland's Setanta and ESPN.

When BT announced in May that it would offer the sportsservice free to its broadband customers, it sent shares in BSkyBtumbling as investors questioned the long-term impact on a groupthat had built its business around sports and movie programmingto broadcast in more than 10 million homes.

BLOW TO BSKYB

The three-year, 900 million pound deal signed by BT is worthmore than double the 400 million pounds BSkyB and ITV agreed topay for the current three-year contract back in 2011.

"We bid with a clear view of what the rights are worth tous," a spokesman for BSkyB said. "It seems BT chose to pay farin excess of our valuation."

BSkyB, 39-percent owned by Rupert Murdoch's 20th Century Fox, first won the rights to show Europe's premier competition in 2002 and has flourished as the Champions Leagueand English Premier League grew in popularity.

In the current three-year contract BSkyB had the right toshow seven live matches on Tuesday nights and eight live matcheson Wednesday night, while ITV showed one live match on Tuesdayevenings, invariably featuring one of the English teams.

The loss of the games from the 2015/16 season will leave ahuge hole in Sky's programming schedule and will likely putpressure on the group to agree a wholesale deal with BT so itcan still show the matches to its subscribers.

Alternatively, Sky subscribers could take pay-TV channelsfrom Sky but take their broadband from BT in order to access allthe live sport.

BSkyB is thought to have around 5 million subscribers to itssports channels, while BT said in October it had more than 2million homes signed up to its new sports service. It is presentin 4 million homes due to a wholesale deal with cable operatorVirgin Media.

"Despite these payments, BT's financial outlook isunchanged," it said. "The rights are expected to driveadditional growth in BT consumer revenue and profits over themedium-term."

The extra money paid by BT could be used by UEFA to boostthe prize money of both competitions, including the secondaryEuropa League.

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