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BT, Sky Prepare For Battle As English Premier League Kicks Off

With the kick-off of the Premier League season this weekend, BT and Sky "are set for their biggest match yet, battling to win over football fans with aggressive marketing campaigns and cut-price offers," according to Lauren Fedor of the FINANCIAL TIMES. BT, which launched its sports broadcasting division just three years ago, "made a big bet" on premium football programming, spending more than £1.8B to "snap up the rights to more than 400 football matches." The telecom "is hoping its new primetime line-up -- BT Sport is broadcasting nearly all of its Premier League games on Saturday evenings this season -- will enable it to lure more of rival Sky’s pay-TV customers." BT is also seeking to leverage its £12.5B ($16B) acquisition this year of the U.K.’s largest mobile operator, EE, "to broaden its sport customer base." Rival Sky, however, is still the U.K.’s "dominant sports broadcaster." Last season, "it aired 49 of the 50 most-watched Premier League matches." This season, the network "is set to air three times as many Premier League matches as BT, including the most-watched Sunday kick-offs" -- and has branded itself "the home of the Premier League." But Sky’s vast programming schedule "comes at a steep cost: in a high-stakes auction last year that saw the overall cost of airing Premier League matches soar" by 70%, the pay-TV leader agreed to pay £1.4B each year for its Premier League rights. BT is paying £320M a year "for its share of the Premier League matches." The high cost of broadcasting football "is multiplying." In June, Sky "agreed to pay" the German Bundesliga €486M ($542M) a season, an 85% increase on the previous auction. But many analysts "point out that networks can only slash so much in operational expenses to offset football costs" -- Sky is targeting £200M ($258M) in cost-cutting this year -- "before it is forced to row back on investment in other programming, such as premium scripted content." Stephane Beyazian, an analyst at Raymond James, said that both BT and Sky were "potentially financially at risk" if they "don’t bring down the pressure on sports content auctions" (FT, 8/12).

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