Sky and BT’s new channel deal could put damper on Premier League TV rights fever

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December 21 – The Premier League’s broadcast rights auction looks like losing some of its heat after BT and Sky struck a deal to carry each other’s channels.

Under the new distribution deal, the BT Sport channels, which carry UEFA Champions League and Europa League games, as well as having a package of Premier League matches, will be supplied to Sky. In turn, BT will be able to sell Sky Sports (which has the dominant share of Premier League matches) to its customers via the Sky Now TV package.

BT has paid £320 million for Premier League rights this season while Sky has paid £1.4 billion. The UK rights tender for the three seasons 2019/20 to 2021/22 has been issued and the auction is expected to complete towards the end of February 2018.

The channel distribution agreement takes a great deal of the “winner takes all” mentality out of the bidding. For Sky it adds a greater degree of security while at the same time giving their football-based subscribers access to mid-week European football.

For BT it gives a greater degree of confidence in their business and particularly its share price which has been weighed down, according to UBS, “by concerns about rising costs of securing sports rights as well as uncertainty over capital expenditure in its planned broadband network upgrade and its pension deficit.”

Sky CEO Jeremy Darroch said: “This is great news for Sky customers who will be able to access all matches on Sky and BT channels from the Premier League, UEFA Champions League and Europa League directly with a single Sky TV subscription.”

Everyone’s a winner, except perhaps the Premier League who have just seen the competitive edge to their tender reduced.

It was always highly unlikely that Premier League was going to see another 70% increase in rights fees from the rights cycle, even with Amazon and Facebook reportedly lining up to take a run at the rights. But their interest for the most part sounds more rhetorical than realistic – and is great PR.

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