Concern Over English Premier League Television Rights Costs Weighs On BT

Concern about the cost of TV rights for Premier League football "cast a shadow over shares in BT on Friday, and led to a broker downgrade," according to Michael Hunter of the FINANCIAL TIMES. Morgan Stanley cut its rating on shares in the fixed-line telecoms operator and new entrant to the pay-TV market to “underweight” from “equalweight.” Analyst Terence Tsui called the upcoming '15 auction for rights to the U.K.’s top football league from '17 an “overhang” for the company, saying, “There are clearly greater risks to the BT equity story as it faces the transition to pay-TV.” Tsui said, "BT currently pays £246 million ($395.9M) per year on English Premier League content. If BT were to spend £1 billion ($1.6B) pa for rights to the 2017-18 season, this would represent a 25 percent downgrade on 2017 free cash flow to equity.” BT, one of the most widely held London blue-chips, fell 1.8% to 370 pence (FT, 10/24).