INVESTORS have “overreacted” to the launch of BT’s sports channels and the competition that they could pose to BSkyB, according to analysts at Morningstar.
Senior equities analyst Allan Nichols said that the market appears to have priced in “significant market share losses at the hands of BT” for BSkyB.
“This isn’t the first time BSkyB has faced new sports channels, and its sports content remains far superior to that of BT,” Nichols said.
“BSkyB also dominates content in other areas, and we think this superiority will allow the firm to continue to grow. While BT’s program may appeal to casual fans, we don’t think the diehard fans at BSkyB will switch.”
Nichols highlighted Sky’s dominance of other markets – such as films and children’s programmes – and noted that BT had only bought the rights to 38 live English premiership games, along with “some rugby, Scottish and European football, and women’s tennis”.
“This pales in comparison with BSkyB’s full sports package,” he added.