Champions League TV deal in focus

Barcelona's Lionel Messi leaves the pitch after a Champions League game, followed by a cameraman From 2015 European action featuring the likes of Messi can only be seen on BT

The football and broadcast worlds are still digesting the impact of BT Sport's decision to pay close to £900m for the exclusive broadcast rights to Champions League and Europa League football matches.

The broadcaster has won the rights to show all 350 fixtures each season, for three years from 2015.

The new contract, priced at £299m a season, is worth more than double the current arrangement, and could mean significantly more money for UK clubs in the two European competitions.

But what does it mean for the sporting and business ambitions of BT Sport, as well as Sky and ITV, the current rights holders?

Here Kevin McCullagh, deputy editor of industry publication TV Sports Markets, offers his opinion on where it has left the three broadcast players.

BT SPORT

"What this deal really does is provide another sign that BT really is a different proposition from Sky's previous and most recent competitors in the pay football market - Setanta and ESPN.

"The size of this deal and the fact it is such an exclusive deal for such a major competition like the Champions League makes it far different from anything those others managed.

"And the amount of money BT has put on the table is of a totally different order that what we have seen before. It shows BT has the financial resources, but also the stomach, for a battle with Sky.

Scotland manager Gordon Strachan (centre) and other BT Sport TV guests BT Sport pundits filmed discussing the Partick Thistle v Dundee United game

"They clearly see televised sport as a very expensive and long-term play. But have they paid too much? That is the huge question.

"BT really needed to spend big money to get a toehold in a market dominated by Sky.

"It is also worthwhile remembering BT launched its sports channels as a means of remaining a major triple-play player - that is, a provider of TV, internet and telephone services.

Start Quote

BT is making a very decisive move for TV rights that are super premium”

End Quote Claire Enders Enders Analysis

"Before the launch of the sport channels, Sky was really making inroads and taking away BT broadband customers. The £900m is not only to add more sports TV subscribers, but to protect their broadband base, which is a much bigger business.

"If BT is still the biggest triple player in 10 to 15 years, they will look back and see this period - and Champions League expenditure - as being worthwhile.

"And by offering their sports products to their broadband subscribers, they are also positioning themselves as the choice for the budget-conscious fan.

"They haven't announced their plans yet for the free-to-air games they will show. They don't have a free-to-air channel and I can't see them launching one.

"So their options are: a) to un-encrypt their pay TV channels during these matches, or b) sub-license on to a free-to-air partner such as BBC or ITV.

"The best thing for BT would be to keep everything on their channels. This allows them to put out the strong marketing message of BT being the only place to watch Champions League/Europa League football."

SKY

"It is a massive blow for Sky. The importance of the Champions League should not be underestimated, nor what a major TV sports rights property it is in the UK.

"It is probably the biggest sporting rights auction Sky has lost.

Sky Sports presenter Tim Abraham talks to camera during day one of the 3rd Investec Ashes Test match between England and Australia Sky's Tim Abraham on camera before an England v Australia Test cricket match

"It is the second biggest subscriber driver after the Premier League, and Sky will feel the impact of this.

"However, Sky has still has a top portfolio, and has got other major sports rights, as well as a broader offering than BT.

"It has a really wide sports offering - including exclusivity to half of the Formula 1 races, England and Wales cricket, La Liga top flight Spanish football, and a major range of golf events.

Start Quote

Did BSkyB break the habits of its entire existence and foolishly bid too little? ”

End Quote Robert Peston BBC Business editor

"This announcement has come as Sky is pouring money into other areas, for example original British drama.

"By offering an increasing breadth of content, Sky is looking to give people other reasons to buy Sky subscriptions, rather than BT's.

"Going back to sport, I don't think that there is anything very obvious that Sky can go out and buy right now to replace the Champions League rights.

"I think they will look to weaken BT Sport when it comes to the next round of Premier League TV rights in England.

"Sky currently has 118 live games a season compared with BT's 38 a season.

"But where BT has done better than Setanta or ESPN is in the number of "first picks" broadcast choices - BT managed to win 18 games, whereas their predecessors got none.

"I think Sky will be looking next time round to reduce BT's number of first picks."

ITV

"This will have hit ITV too, as over the decades they have become the terrestrial television home of Champions League football. They have also been showing the Europa League on ITV4.

ITV loses its Champions League rights after 2015 ITV's panel of experts discuss Real Sociedad v Manchester United

"With BT grabbing the Champions League rights, it means that ITV loses its top televised football competition. although they do have live England internationals, which attract strong viewing figures.

"But, having lost the FA Cup to the BBC, ITV now has no top-level live club football.

Start Quote

"What has happened to ITV is being seen around the world, where big global TV sports rights are migrating to pay-TV”

End Quote Kevin McCullagh TV Sports Markets

"The upside is that the CL and EL were expensive and this has freed up a large chunk of budget that they can spend on other content. They will have roughly £50m a year available to spend that is currently going on Champions League football rights.

"They may need to invest in midweek evening content for young men.

"But, again as with Sky, there is not a lot of available football or other sports rights out there to replace the Champions League.

"What has happened to ITV is being seen around the world, where the big global TV sports rights are all migrating to pay-TV.

"It is the most compelling way to bring people on board as pay-subscribers.

"I am talking about seasonal-long events, such as the Premier League or Champions League, where you have a series of games and can build interest and a following over a year (rather than a World Cup or Olympic Games).

"As a result we are seeing a growth in value in top sporting TV rights."

More on This Story

The BBC is not responsible for the content of external Internet sites

More Business stories

RSS

BBC Business Live

  1.  
    Bank culture Via Email David Stanley from Richmond

    writes: "Where does all the money [from fines] go? Presumably some goes in compensation to the victims, but the rest? To pay off the deficit?"

     
  2.  
    Via Twitter Lauren Davidson, business reporter at The Telegraph

    tweets: "From Times Mag profile last month: CEO Harriet Green fixed Thomas Cook, earned less than her male predecessor."

     
  3.  
    07:40: Thomas Cook
    Green

    A little more on Harriet Green's departure from Thomas Cook. "I always said that I would move on to another company with fresh challenges once my work was complete," she says. "That time is now." The statement adds that when Ms Green joined, the company's share price was 14p. Today, it is 137.9p.

     
  4.  
    Via Twitter Simon Jack Business correspondent, BBC News

    tweets: "Harriet Green steps down as CEO of Thomas Cook after only 2 years. She once told me she never stays anywhere for long but this is very brief."

     
  5.  
    07:30: Thomas Cook
    Thomas Cook

    Overall, Thomas Cook, which has been struggling to compete with the rise of internet travel agents, made a statutory pre-tax loss of £114m for the year to the end of September. It's an improvement on the year before, when it made a £163m loss.

     
  6.  
    07:24: Compass profits
    Students receive their lunch at Salusbury Primary School in northwest London

    Global catering and support services firm Compass group - if you have never eaten their food, there is a very strong chance your children will have eaten it at school - has reported a 5.4% rise in pre-tax profits to £1.16bn for the year to the end of September. "Food is and will remain our core competence and is backed with some strong support service businesses," the company says.

     
  7.  
    07:18: SAS enlists Flybe
    SAS

    British low-cost airline Flybe has announced it has signed an agreement with Scandinavian carrier SAS, to operate some of its short haul services. It's a white-label deal, meaning SAS insignia will be displayed on the planes, and the flights will seem to the outsider like a regular SAS service.

     
  8.  
    07:08: Thomas Cook

    Holiday travel company Thomas Cook has announced that its boss, Harriet Green, is to step down. She will be replaced by Peter Fankhauser, currently the chief operating officer. Ms Green only joined the firm two years ago.

     
  9.  
    07:04: Royal Mail goes to Parliament

    That's all happening at 9:30, by the way.

     
  10.  
    Royal Mail goes to Parliament 07:02: Via Blog Kamal Ahmed BBC Business editor

    Royal Mail chief executive, Moya Greene, will for the first time appear in public to make the case about why the universal, UK-wide postal service is in imminent danger. And if the written evidence Royal Mail has sent to the committee is anything to go by, her words will certainly be punchy. The written evidence calls for urgent intervention by regulator Ofcom and warns if not: "A tipping point could be reached. The universal service could become unviable before effective changes can be implemented."

     
  11.  
    06:52: Bank culture Radio 5 live
    UBS

    One more from Lord McFall on Wake Up to Money. He says senior managers at banks "have often pleaded ignorance or stupidity rather than culpability" and that has to change. He cites an example of four top executives at Swiss bank UBS who came before the Committee on Banking Standards. Asked if they knew the name of their "star performer" who had just lost the bank $2bn, they replied that they didn't, he says. "The first they had heard of it was on the Bloomberg wires," Lord McFall adds.

     
  12.  
    06:46: BG boss' pay BBC Radio 4

    Mr Walker adds that BG Group's pay offer illustrates "poor corporate governance", and "puts fund managers in a position where they are forced to approve" the £25m remuneration package for new boss Helge Lund.

     
  13.  
    06:44: Bank culture Radio 5 live
    Air force

    The £27bn that banks have paid in fines for the mis-selling of Payment Protection Insurance (PPI) outstrips this year's defence budget, says Lord McFall. Since the start of the financial crisis, banks have paid out more than £38bn in fines, for a litany of sins. What makes matters worse is that he and other MPs were warning the banks over the dangers of PPI for 20 years, before the mis-selling scandal broke, he adds.

     
  14.  
    06:32: BG boss' pay BBC Radio 4
    Mr Lund

    "A red rag to anti-capitalists," is what Simon Walker, from the Institute of Directors (IoD), calls the proposed £25m pay packet for the incoming head of gas explorer BG Group, Helge Lund. He tells Today "you could not calculate a measure that is more likely to inflame" politicians, and the general public, who will balk at the sum, which is "more than 10 times [Mr Lund's] pay in Norway", where Mr Lund ran the state's oil firm.

     
  15.  
    06:24: Bank culture Radio 5 live
    McFall

    Lord McFall tells Wake Up to Money initiatives to change the culture in banks are "fledging and fragile". He adds: "Rhetoric at the top has been implemented, but not carried down the line [into bank departments]". The aggressive sales culture of the banks will be eliminated eventually. But the banks can't do it alone, he adds. He is also calling on the banks to provide annual progress reports to Parliament's Banking Standards Committee.

     
  16.  
    06:14: Welfare reforms

    The UK's National Audit Office has warned that the cost of introducing major welfare reforms could run into billions of pounds if the IT system needed to deliver the changes isn't completed on time. The Universal Credit programme has been beset by IT problems, and the chairman of the public accounts committee, Margaret Hodge, has accused the government of throwing good money after bad. Ministers insist they are getting value for money.

     
  17.  
    06:10: Bank culture Radio 5 live

    UK think tank New City Agenda says it will take "a generation" to fix the culture of the banking industry, in a report published today. The organisation's chairman, Lord McFall, who is also former chairman of the Treasury Select Committee, tells Wake Up to Money the report is the first to have gone inside the banks - it visited 11 of them - so provides a real insight into what is going on, and it's not pretty.

     
  18.  
    06:05: Clegg on immigration
    Clegg

    The UK's deputy prime minister, Nick Clegg, has said he supports further restrictions on benefit payments to migrants from elsewhere in the European Union. Writing in the Financial Times, the Liberal Democrat leader also warns David Cameron against trying to limit the number of EU migrants coming to the UK.

     
  19.  
    06:00: Matthew West Business Reporter

    Plus Moya Greene, chief executive of the Royal Mail, will be giving evidence to the Business Committee - as will a number of her rivals - on competition in the postal sector and the government-mandated obligation to deliver to all UK addresses. As always, get in touch on email at bizlivepage@bbc.co.uk or on Twitter @bbcbusiness.

     
  20.  
    06:00: Joe Miller Business Reporter

    Morning. The president of the European Commission, Jean-Claude Juncker, will set out details this morning of a €300bn plan intended to revive Europe's flagging economy. Most of the money is expected to be provided by the private sector. More on that in the next few hours.

     

Features

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.