Premier League Football Should Tempt You To Buy BT Group Plc

With its Premier League football offering widening its potential customer base, BT Group plc (LON: BT.A) suddenly looks quite tempting.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

The way in which Premier League football rights are distributed has always confused me.

With so much focus being on promoting competition within various markets in the UK, it seems rather absurd that one company can essentially dominate not only the Premier League rights, but use those rights as the main differentiator between it and the competition.

5 Stocks For Trying To Build Wealth After 50

One notable billionaire made 99% of his current wealth after his 50th birthday. And here at The Motley Fool, we believe it is NEVER too late to start trying to build your fortune in the stock market. Our expert Motley Fool analyst team have shortlisted 5 companies that they believe could be a great fit for investors aged 50+ trying to build long-term, diversified portfolios.

Click here to claim your free copy now!

However, it seems as though that has been the situation in the UK for many years now, with BSkyB enjoying something of a near-monopoly status as a result of its seemingly iron-like grip on Premier League football.

Indeed, BT (LSE: BT-A) (NYSE: BT.US) may just have broken BSkyB’s hold on the market. It successfully bid for over 100 live games and won. It then proceeded to offer them for free to its broadband customers in an attempt to win market share from rivals.

Although this strategy was initially viewed as little more than a good way to lose money, a deal struck with Virgin Media now seems to be something of a game changer and makes me, a long-term sceptic of BT, suddenly very tempted to buy the shares.

The deal with Virgin Media makes BT’s sports offering available to Virgin customers, and is expected to be a key means of the company recouping its £1 billion investment in the sports channels.

The three-year agreement was signed just before the first Premier League match kicked-off and extends the channels’ reach to over two million households. It is believed that the deal could net BT up to £80 million per year.

Of course, the really interesting part of the deal is that BT has forged an alliance with another of BSkyB’s major competitors. In doing so, it has clearly thought through its long-term game plan.

Indeed, BT may not yet be capable of competing with both Virgin Media and BSkyB, so why not gain an ally and together look to gain market share from BSkyB? Then, when BSkyB’s position is weakened, why not go it alone and try and take on Virgin Media, once BT’s position has been solidified.

So, rather than merely viewing the deal with Virgin Media as a means of recouping £75 million per year, I see it as a further step in BT’s ultimate mission to become the major player in broadband, TV and general media content.

For this reason, I think that BT could have an exciting future ahead of it and I must admit that its shares look tempting at current levels. Trading on a P/E of 12.1 and offering a yield of 3.1%, when the FTSE 100 has a P/E of 15 and a yield of 3.6%, makes me want to buy them at their current price of 327p.

Of course, you may be looking outside of the media and telecoms sectors for an addition to your portfolio. If you are, The Motley Fool has come up with a shortlist of its best ideas called 5 Shares You Can Retire On.

It’s completely free to take a look at the shortlist and I’d recommend you do so. Click here to view those 5 shares.

> Peter does not own shares in BT.

Is this little-known company the next ‘Monster’ IPO?

Right now, this ‘screaming BUY’ stock is trading at a steep discount from its IPO price, but it looks like the sky is the limit in the years ahead.

Because this North American company is the clear leader in its field which is estimated to be worth US$261 BILLION by 2025.

The Motley Fool UK analyst team has just published a comprehensive report that shows you exactly why we believe it has so much upside potential.

But I warn you, you’ll need to act quickly, given how fast this ‘Monster IPO’ is already moving.

Click here to see how you can get a copy of this report for yourself today

More on Uncategorized

Light bulb with jester hat perched on top

New look. Same Foolish investing.

Maybe you already noticed — things are looking a little different around here. At the top corner of our site,…

Read more »

Light bulb with jester hat perched on top

We have some exciting news!

You could even say it’s 25 years in the making...

Read more »


Tesco PLC Is Doing All The Right Things And I’m A Buyer

I’m a big fan of how Tesco PLC (LON: TSCO) is turning itself around and here’s why…

Read more »


What’s Stopped Me From Buying Gulf Keystone Petroleum plc Today

Royston Wild considers the investment case for Gulf Keystone Petroleum plc (LON: GKP).

Read more »


Dow Futures Fall Ahead Of Durable Goods Report

Stock index futures ahead of this morning's durable goods orders report indicate that the Dow Jones and S&P 500 may…

Read more »


What’s Stopped Me From Buying BHP Billiton plc Today

Royston Wild considers the investment case for BHP Billiton plc (LON: BLT).

Read more »


3 FTSE Shares Hitting New Highs: National Express Group PLC, Brammer plc and Hilton Food Group plc

National Express Group PLC (LSE: NEX), Brammer plc (LON: BRAM) and Hilton Food Group plc (LON: HFG) set new records.

Read more »


Should I Buy Legal & General Group Plc?

Legal & General Group plc (LON: LGEN) has seen its share price rise 50% in the last 12 months, Harvey…

Read more »