Sky plc Beats BT Group plc In Battle For Premier League Football Rights

Who’s really won the broadcasting battle: SKY PLC (LON:SKY) or BT Group plc (LON:BT.A)?

| 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.

Media giant Sky (LSE: SKY) has temporarily won the battle against telecoms giant BT (LSE: BT-A) for showing FA Premier League matches from 2016-19, though the former’s shares fell 5% in early trade while the latter’s rose c.3%, indicating that the market may believe the deal was too expensive.

The FA Premier League said Sky had won five of the seven TV packages, paying £4.2bn for the privilege, while rival BT paid £960m for the other two in a record TV rights auction. Sky also won the key Sunday afternoon games.

Inflation Is Coming

Inflation is out of control, and people are running scared. But right now there’s one thing we believe Investors should avoid doing at all costs… and that’s doing nothing. That’s why we’ve put together a special report that uncovers 3 of our top UK and US share ideas to try and best hedge against inflation… and better still, we’re giving it away completely FREE today!

Click here to claim your copy now!

BT will have exclusive rights to the Champions League from next season, but will lose its early Saturday kick-off to Sky. The deal will run for three years from 2016.

Sky paid 83% more than it did in the last round three years ago. BT paid 18% more and has increased the number of live matches it will show from 38 to 42 a year. BT will pay £320m per season, against £246m per season at present.

The previous three-year deal cost Sky and BT around £3bn; this time it was over £5bn – 71% higher than the costs of the rights between 2013-2016.

After the auction, Sky admitted the amount it paid for the TV rights was about £330m more than analysts had forecast.

The results of the auction means it will cost the two broadcasters an average of £10.19m per game to show a single Premier League match, (as reported by the BBC).

So where does this deal leave Sky and BT?

For both these companies, it is a “win, win” situation. For Sky, paying for a “luxury brand” like the Premier League will drive subscriptions to its basic and premium TV, HD and Over-the-Top services, as well as its broadband and telephony services. For BT, no doubt this deal will attract more customers to its BT Sport channels and broadband products.

Where does this deal leave Sky and BT customers?

Sky customers seem to be the better off according to media analysis company Ampere Research. For every TV customer, Sky spends £125 on sports, of which £89 goes to the Premier League; by way of comparison, BT spends £209 per TV customer a year on the Premier League – a dramatic 134% more than Sky.

Where does this deal leave investors in both companies?

Some investors may think that BT and Sky have stretched their budgets when it comes to spending on these Premier League matches — but what’s new?  Sky’s shares have been up 7% over the last year compared to a 6% hike for the wider FTSE 100. In comparison, BT’s shares have risen 16% over the last year, as compared to a 4% hike for the wider FTSE 100, and this news seems to have been well received by the market. 

Sam Hart, analyst at Charles Stanley, says: “Whilst Premier League football can clearly be a key factor in the decision to take up a Sky subscription, we highlight that Sky Sports customers watch a wide variety of sports and that Sky also attracts many customers who do not subscribe to a Sky Sports package at all. The BT Sport proposition remains much narrower than Sky Sports and should probably be viewed as a supplement to a Sky subscription rather than a substitute.”

More on Investing Articles

Warren Buffett at a Berkshire Hathaway AGM
Investing Articles

How I’d apply the Warren Buffett method to buying shares

Learning from billionaire investor Warren Buffett, our writer explains his own approach to investing in shares for his portfolio.

Read more »

pensive bearded business man sitting on chair looking out of the window
Investing Articles

This dividend share yields under 1% — but I’d still buy it

This dividend share has a low yield. So why would our writer consider adding it to his income portfolio?

Read more »

Young lady working from home office during coronavirus pandemic.
Investing Articles

Looking for a good share to buy? Here’s how I do it

Here are two approaches our writer uses when hunting for a good share to buy for his portfolio to aim…

Read more »

man in shirt using computer and smiling while working in the office
Investing Articles

One cheap FTSE 100 share I’d buy for a new bull market

This FTSE 100 share is unloved and starting to look seriously cheap, says Roland Head.

Read more »

Young brown woman delighted with what she sees on her screen
Investing Articles

How I’d invest £500 in UK shares in 2022

Investing a small amount of capital in UK shares can result in high commission costs. Zaven Boyrazian explains how to…

Read more »

Black woman using loudspeaker to be heard
Investing Articles

2 battered FTSE dividend stocks to buy in July!

I'm still searching the FTSE 100 for the best bargains to buy. I think these two big dividend shares are…

Read more »

Woman pulling baffled face
Investing Articles

Can I trust Lloyds’ 6.1% dividend yield?

The Lloyds' share price has sunk in 2022, causing the bank's dividend yield to leap. But can I really trust…

Read more »

Young mixed-race woman looking out of the window with a look of consternation on her face
Investing Articles

3 top stocks to buy before the market rebounds

Edward Sheldon highlights three beaten-up stocks he'd buy before global stock markets stage a recovery from their 2022 declines.

Read more »