Glenn Moore: New rival raises stakes but Sky remains dominant
Analysis: BT has been bold but the satellite giant has seen off plenty of market challenges
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BT's swoop for broadcast rights in rugby union will be welcomed by the purveyors of high-end cars across England as well as governing bodies, players and agents involved in other sports. Coming after its foray into Premier League football, the move is confirmation that there is another player in the sports broadcast market – and competition drives up value.
However, BSkyB, the market's dominant force, is not worried yet, for most of its key products are signed up for several years, having negotiated a dozen renewals over the past 18 months and added Formula One to its portfolio. Indeed, there seem to be few immediate areas in which BT can add to its own offering as it seeks to build a package which will either bring in viewers new to the subscriber market, draw them away from BSkyB or persuade sports fans to take both.
The next major football deal coming to market will be with the Football Association. The FA agreed a two-year deal with ITV to cover all England friendlies and home World Cup qualifiers, and the pick of FA Cup games (ESPN also broadcasts FA Cup ties), at the beginning of this year. From 2014, England's competitive internationals will be marketed through Uefa as part of a pan-European deal. The FA, which has been guaranteed £25m a year from Uefa, will sell the rump: England friendlies and FA Cup ties.
The increasingly competitive market forced BSkyB into paying a hugely increased price for Premier League matches from next season, £2.28bn over three years. However, the rising price of football rights has not been matched in other areas with some deals stagnating or even declining.
Under BT's deal, the firm is itself committed to paying £738m for 38 matches a year, but needs more than those matches to build a subscriber base. BSkyB has already seen off ITV Digital and Setanta during two decades broadcasting the Premier League while Disney-owned ESPN's attempt to muscle into the English sports television landscape suffered a body blow when it lost out in the summer negotiations.
In the long-term, football authorities hope that Qatari-based Al Jazeera will follow up its entry into the French game, where it has secured Ligue 1 and Champions League rights, by seeking English rights.
BT may, of course, decide to test the strength of the British public's new-found fervour for all things Olympian and Paralympian and seek rights to cover sports which traditionally receive limited, if any, television coverage. It is not, however, an approach which is likely to boost a share price which rose 2 per cent on news of the rugby union deal.
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