[Satellite TODAY Insider 06-14-12] British Sky Broadcasting (BSkyB) and BT Group surprised the sports market by outbidding ESPN network for the rights to broadcast live matches of the United Kingdom’s popular Premiere Soccer League, the companies confirmed June 13.
Analysts expected ESPN to secure rights to more games than the 23 live matches it won in the previous auction. Though BT won its first ever rights to the English Premier League, BSkyB dominated the auction, driving competitive broadcasting costs up 41 percent. The price to broadcast the soccer matches from 2013 to 2016 was $4.69 billion, compared to the $2.76 billion sale price at the last auction.
“Whie 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,” BSkyB CEO Jeremy Darroch said in a statement. “As a result, we remain confident of delivering our financial plans, in line with our expectations, unchanged, in each year of the new deal.”
Premiere League broadcasting rights are critical to BSkyB’s financial strength, as the broadcaster relies heavily on its ability to attract customers through its coverage of the games on its Sky Sports channels. BSkyB had 10.6 million household subscribers at the end of March. The pay-TV operator also charges U.K. pub owners thousands of pounds each year to show the Sky broadcasts.
BT, however, had been moving away from its fixed-line telephony background to offer packages including phone, broadband and TV. The company doesn’t have its own TV channels, though it redistributes TV offering from other broadcasters. BT CEO Ian Livingston, however, confirmed his company would launch a new soccer-focused channel to carry the games.
“BT is already investing [$3.8 billion] in fiber broadband. Securing Premier League rights fits naturally with this, as consumers increasingly want to buy their broadband and entertainment services from a single provider,” Livingston said.
ESPN still maintains the rights to show next season’s Premier League matches in the United States. The broadcast said it was not yet clear how the setback in the United Kingdom would impact its ability to regain its U.S. rights at an upcoming auction.