Premier League auction turns heat up on Sky

Premier League rights are high on the agenda
Sky's reliance on Premier League football rights was highlighted again yesterday after a leading broker reiterated its “sell” rating on the company by reminding investors about the significance of the sporting contract to the company’s future.

Broker Liberum Capital published fresh research identifying the auction for the Premier League’s viewing rights – which began last week – as one of the most important aspects to Sky’s global operation.

Analyst Ian Whittaker said Sky’s sources of revenue could be “significantly at risk” if it fails to outbid BT for the football rights, which could cost up to £1.5bn.

“The problem is that if BT wins the majority of the rights, a lot of consumers will ask why they are paying so much for Sky,” he said.

“They will switch to BT, particularly if BT pushed [the football rights] with a very aggressive broadband offer, and our research suggests that those subscribers who are left will say they should pay less anyway.”