After a long and drawn out race, BT has finally got its Warner Bros Discovery sports venture over the line.
Following months of negotiation, the telecoms giant confirmed this morning that it will now form a 50:50 joint venture with the US media giant, bringing together BT Sports and Eurosport under one umbrella in the UK and Ireland.
Under the terms of the agreement, BT will receive £93m in installments over the next three years, cashing in up to £540m in performance based payments over four years for the coverage of everything from the Premier League to Giro D’Italia cycling.
Whilst BT Sport and Eurosport will continue to operate as two separate brands, it is understood they will be brought together under one single entity in the future, with BT eventually being bought out by the US giant.
BT’s grand push into sport started when it secured rights to Premier League matches back in 2012, later securing Champions League and Europa League games from Sky.
However, as explained by the managing Director of TMT at Edison Group Dan Ridsdale, the tie-up provides a “new focus for investors and consumers alike” for BT.
Ridsdale said that the new offering would provide more value for customers who have started to look for ways to cut down on costs and slim down on streaming services.
AJ Bell’s investment director Russ Mould echoed this point, stating that the promise of top-level sports is a key way to secure subscribers for wider TV and broadband, especially with big dogs like Netflix slowly but surely shifting from a necessity to luxury for many households.
“Sports rights are highly prized as events such as football are one of the few areas guaranteed to attract ‘live’ viewers as opposed to people watching via catch-up”, Mould said. “Having a partner with deeper pockets to help fund the cost of securing rights as well as adding Discovery’s existing Eurosports channel to the mix looks an attractive combination”.
BT cushioned its full year results alongside the announcement this morning, revealing that revenue fell two per cent from the previous year to £20.9bn, and below consensus estimates of around £21.4bn.
Earnings before interest, tax, depreciation and amortisation rose two per cent to £7.6bn in 2021, again only slightly exceeding analyst expectations.
Commenting on this dip, BT’s chief Philip Jansen said: “While the economic outlook remains challenging, we’re continuing to invest for the future and I am confident that BT Group is on the right track.”
The company said it would pay a full-year dividend of 7.7p per share in 2022.