Bottom Line: Beware the hype, this game’s only just kicked off

 
Elizabeth Fournier

IT HASN’T even started broadcasting yet, but BT Sport has already cost the group £40m – or one Luis Suarez – in pre-launch expenses.

Yesterday outgoing chief executive Ian Livingston was keen to highlight the 500,000-odd households that have signed up for the new service, which goes live next Tuesday.

But take a closer look at the statement and it’s hard to distinguish genuine growth prospects from hype and posturing designed to rile up Sky, as the battle of the brands starts to really heat up.

Livingston himself admitted that most of the BT Sport take-up was coming from existing customers who have been offered the service for free, so the early numbers give very little idea of future success.

BT may be lowering its churn rate by giving subscribers something for nothing – line losses fell to 130,000 from 154,000 in the fourth quarter last year – but it’s hardly making headway on upping broadband numbers, which unless the sports service really takes off would be the best side effect that investors can hope for.

BT has poured a huge amount of money into Sport. The £40m costs reported yesterday don’t even touch on the £740m it has committed to live football, and the firm is still warning investors to expect a two per cent hit to earnings this year as the costs mount up.

Livingston was resolutely upbeat on yesterday’s call, calling the uptake a very encouraging start.

But that’s easy to say when you’ve got one foot out the door. It’s new boss Gavin Patterson – and investors – who are going to have to shoulder the longer-term effects.