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SBD Global/March 27, 2014/Media

Key Figure In BT's Multi-Billion-Pound Football Strategy To Step Down

Marc Watson was instrumental in BT's foray into football broadcasting.
BT TV CEO Marc Watson "has been squeezed out as part of a major revamp of the telecoms company’s media divisions," according to Nic Fildes of the LONDON TIMES. Watson will leave "as his division is merged with BT Sport into one unit." BT is "now looking for a new managing director for the expanded business to improve its standing in the TV market." BT has spent £2B ($3.3B) on a host of sports rights over the past two years "in a radical shift in strategy." The scale of the investment meant that BT "now has much riding on its TV strategy." It said in January that 2.5 million customers had signed up for BT Sport, but that its BT TV platform still only has 950,000 subscribers eight years after it was launched. Enders Research analyst Toby Syfret said, “The take-up of their TV service has been very slow, especially in recent quarters when they’ve had BT Sport. BT has got major challenges if it wants to make this work in a financial sense. It’s got a long way to go and this suggests they need a very big rethink” (LONDON TIMES, 3/26). In London, Christopher Williams reported while he was involved in setting up BT Sport, such as by recruiting key figures such as Senior Exec Producer Grant Best, Watson's responsibilities "do not include running the channels." Yet "the heavy investment they represent," which now also includes a £897M ($1.5M) outlay on Champions League rights, means that they "are now the most important part of BT’s television plans." The high-stakes strategy is overseen by BT Consumer Division CEO John Petter, a lieutenant of the group's CEO, Gavin Patterson. Petter "will appoint a managing director" of BT TV & Sport in place of Watson, "with responsibility for running BT Sport as well as managing the other parts of its television business" (TELEGRAPH, 3/26).

FRESH CHALLENGE: In London, Daniel Thomas reported Watson "also helped strike the deals for other sports" such as Premiership Rugby. The football deals "caused particular shock in the media sector given the unexpectedly grand ambition" shown in the outlay of close to £2B as BT "seeks to create bundled offers of TV, broadband and home telecoms." His departure also comes as BT "nears an agreement to renew the shareholder pact" for YouView, the Internet connected TV set top box. The original investors including most large British broadcasters "are expected to retain ownership of the TV platform, although BT and rival TalkTalk are expected to increase funding commitments." Watson said that it was the right time to “take on a fresh challenge.” He added, “I am proud of what we have achieved in BT TV. We have built a top quality TV service from scratch and BT Sport is thriving thanks to the great live sport we’ve secured. I am sure the business will go from strength to strength and I wish everyone at BT well” (FINANCIAL TIMES, 3/26). In L.A., Stuart Kemp reported Watson's departure "sparked speculation that the telecom giant may be considering a strategy change after its high-stakes entry into the pay TV arena and competition for content." The stock prices of both BT and pay-TV competitor Sky "fell only slightly in a sign that investors didn't expect major strategy changes" (HOLLYWOOD REPORTER, 3/26).
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