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SBD Global/June 22, 2012/Media

BT Placed Bids For All Premier League Football Rights

The competition was fierce for media rights to broadcast Premier League football.
BT "tried to pull the rug" from under BSkyB’s football coverage by bidding for the rights to all of the Premier League matches, according to Kelso & Rushton of the London TELEGRAPH. BT "made a surprise entry" into the market last week, agreeing to pay £738M ($1.1B) to show 38 matches a season for three years beginning in '13. However, it was "trying to buy a much bigger share" of the 154 games on offer. BT lodged bids for all seven of the “packages” in which Premier League rights are auctioned, although it "could not have won more than five for competition reasons." Even at this level, BT poses "a serious threat" to BSkyB. The pay-TV broadcaster, which is 39% owned by Rupert Murdoch’s News Corp., has "built its business on top-tier football rights." In the latest auction it was forced to pay about 40% more than in previous years "to retain the lion’s share" of Premier League matches (TELEGRAPH, 6/21). Meanwhile, the ECONOMIST opined on the blog Game Theory, "What can £3B ($4.7B) buy?" It was a "mind-blowing price" that BSkyB and BT agreed to pay. Not only is the price "staggering," but it also "shined a light on BT's ambitions to compete more aggressively against BSkyB." Enders Analysis Industry Observer Ian Watt said that BT has, in effect, "begun a long-term plan that is destined to lose money up front in the hopes of fortifying the company's position down the road -- perhaps in time for the next round of bidding." Some Americans "gazing at this kerfuffle from afar" have wondered whether they "should feel embarrassed for ESPN." Well, "no." ESPN "didn't expect to hold on to" the 23 Premier League games it now broadcasts in Britain. The company had already said that it "can't compete" with pay-TV providers like BSkyB, which "justify their high bids as the price for acquiring more subscribers and advertising." The economics of ESPN "are different." The channel makes its money through advertising and affiliate fees. Bernstein Research Media Analyst Todd Juenger said that "this makes the outcome of the bid a non-event for ESPN" (ECONOMIST, 6/20).
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