BSkyB saw over £1.5bn (€1.8bn) wiped off its stock market value yesterday after Rupert Murdoch’s pay-TV group was beaten at its own game with the loss of Champions League soccer rights in the UK.
Shares in the British group tumbled more than 10% after it suffered its first major rights auction loss to BT. The former state telecoms group agreed to pay £900m (€1bn), more than double the previous contract with BSkyB and ITV, to add mid-week ties featuring top European teams such as Manchester United and Bayern Munich to the English Premier League matches it already shows.
For BSkyB, the loss raises the likelihood it will have to pay more for future content deals. It also leaves it suddenly looking vulnerable in a market it helped to build.
“It is hard to see how this does not signal a British crossing of the Rubicon and the end of peaceful co-existence in the UK telecom and TV worlds,” analyst Robin Bienenstock at brokerage Bernstein said.
BT stunned the sporting world last year when it won the rights to show 38 live Premier League matches a season.
While the new entrant to the market remained a minnow in comparison to BSkyB and its 116 games, the move was an early indication of how BT was willing to spend big to protect its core broadband and fibre services by combining it with an offer of high-quality sports programming.
The move mirrored that of Sky, which built up its business to broadcast in more than 10m homes by outbidding rivals such as ITV and the BBC for sports and movies, particularly the premier league in England.
Sky will keep hold of the rights to Formula 1, golf, and important cricket competitions, and is likely to increase its investment in original British drama and US programming. The group said Champions League soccer only made up 3% of its total viewing on Sky Sports and said it would rather invest in a different range of programming.
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