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SBD Global/November 13, 2013/Media

BT CFO Says Company Believes Football Deal 'Makes Commercial Sense'

BT CFO Tony Chanmugam told CNBC that despite criticism the company overpaid for the rights to broadcast UEFA Champions League and Europa League games at £900M ($1.4B), "we generally believe that we can monetize this and it makes commercial sense." Chanmugam: "We've got a long track record of having delivered what we said we would deliver, both in terms of EBITA guidance and our cash flow guidance, and what we're saying here is our guidance remains unchanged as a result of doing this. So we don’t think we've overpaid." Chanmugam said the company's "pricing strategy outside sport remains completely unchanged" and with sport pricing the "free offerings continue and what we have said is that we will charge for the Champions League. But the reality on that charging is it could well be that the charge is zero if you take bundle services. So the key point here is that we think we will be able to provide the customer an alternative choice" ("Squawk Box Europe," CNBC, 11/11).

PRICE 'SHOCKED' MARKETPLACE: However, Sportcal CEO Mike Laflin said the "market is pretty shocked at the scale of the fees paid by BT" which is "double what the current deal is worth." Laflin: "It's a lot of money but it secures BT an exclusive package which no one's ever had before. It's going to be very interesting to see how they develop this and of course, this is a challenge to BSkyB." Laflin said "there's a massive hyperinflation" for these league rights but "this is not just about sport." This is about BT "building and establishing their broadband subscribers and using sport as the delivery platform which has worked incredibly well" for BSkyB. Laflin: "BT is playing Sky at their own game" ("Worldwide Exchange," CNBC, 11/11).
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