One of the "most brutal battles" in the U.K. TV market was resolved after BT and Sky "struck a deal to carry each other's content," according to Nic Fildes of the FINANCIAL TIMES. The reciprocal agreement means BT can offer Sky Sports, Sky Cinema and Sky Atlantic directly to its customers, while Sky can sell BT Sport. It comes ahead of the next auction for Premier League rights, due in February, "which will pit BT and Sky against each other for broadcasting rights." The dispute had been "simmering for years," as BT attempted to take on Sky in the pay-TV sector by outbidding its rival for exclusive sports rights and building its own entertainment base through agreements with content producers, including U.S. channel AMC. However, BT "has struggled to build its brand in entertainment and to compete with the power of Sky," which spent almost £7B ($9.3M) on programming this year (FT, 12/15). In London, Mark Sweney reported the agreement means Sky customers will be able to watch BT channels with sport, including Champions League, Premiership Rugby and Premier League matches it does not currently air, without a separate subscription. The deal will give BT a "much needed boost" -- new quarterly subscriber numbers have dropped to a record low of about 8,000 -- with prime Sky content including all Premier League football matches to be made available. BT "stands to gain the most from the deal." With "just" 1.7 million TV customers and "anaemic growth," it needed to "supercharge its content." Sky will gain access to pay-TV fans. Analysts believe it "could affect the scale of bidding" when the Premier League TV rights auction begins. The channel deals mean that Sky and BT customers can gain access to all Premier League matches without being forced to choose to buy TV packages from either or both. Analysts believe this "could mean the fear of missing out on the best games package in the auction -- which has spurred rampant price inflation in recent bidding -- could recede." Ampere Analysis Dir Richard Broughton said, "This could mean that BT and Sky can take their foot off the accelerator. The cost to either BT or Sky of 'no access' to games has massively reduced, so they may not feel they need to bid as competitively. Of course there is the big unknown of whether a new bidder, like Amazon, might enter the auction" (GUARDIAN, 12/15). Also in London, Ayesha Javed reported the new services will be available to Sky's 22.5 million subscribers and BT's customers from early '19. Sky CEO Jeremy Darroch said that the move was part of the company's stated strategy to "enhance our customer offering, to broaden our appeal and to open up new revenue streams for our business." The move came a day after Disney agreed to buy most of 21st Century Fox's assets, including Sky. CMC Markets Chief Market Analyst Michael Hewson said, "This certainly seems a better deal for BT than it is for Sky given that Sky will take BT's sport content while BT gets Sky's sports, cinema and Sky Atlantic channel, and could even gain more access to content further down the road" (TELEGRAPH, 12/15).
