The battle between home communications giants Sky and BT "will heat up with figures due from both firms amid reports that Sky is in talks over a tie-up with Vodafone to curb the power of their resurgent rival," according to the PA. Sky "has been left reeling" after losing out on the U.K. rights to show Champions League and Europa League matches in November as BT "continues to step up pressure." Sky and Vodafone "have been discussing ways to strengthen their defences against BT," possibly involving a deal on Sky's sports and mobile channels and working together on a high-speed broadband service (PA, 1/26). In London, Simon Duke wrote Sky's profits are "set to tumble more than 10% following BT’s attack on the satellite broadcaster’s sports stronghold." Sky saw pre-tax earnings slide from £610M to about £540M between July and December, according to forecasts. Sky, which publishes first-half results on Thursday, "has been hit hard by BT’s aggressive push into the sports arena." Sky has spent more than £2B amassing a bevy of broadcast rights, including Premier League and Champions League football and rugby. Its raid on the English top-flight football alone will add £220M ($363M) to Sky’s overheads this year, according to the investment bank Morgan Stanley (SUNDAY TIMES, 1/26).
