Figures for BT Sport first year to be revealed

BT Sport includes coverage of Scottish football. Picture: SNS
BT Sport includes coverage of Scottish football. Picture: SNS
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FOOTBALL and fibre broadband will feature this week when BT unveils second-
quarter results underpinned by continuing growth in its consumer business.

The figures cover the period marking the first anniversary of BT Sport, launched in August 2013 in a bid to break up Sky’s dominance in top-flight broadcasting. BT has invested heavily for the rights to air Premier League, Champions League, Aviva Premiership and other club matches.

Gavin Patterson, chief executive of BT, said there is continuing high demand for live sport on television. His group is leveraging this to shore up its position in broadband, offering free access to BT Sport to customers who buy internet and telephone services.

In Edinburgh last week for a regular review of BT’s commercial sponsorship deal with the Scottish Rugby Union, Patterson told Scotland on Sunday that sport is an ideal platform for showcasing the group’s technology.

“We have put a lot of money into it, but we can see in our results that it is working for us,” he said.

BT posted solid first-quarter figures earlier this year after a record performance from its consumer division, where revenues rose by 26 per cent. It added 104,000 new broadband customers to go to 2.3 million at the end of June, while picking up 40,000 TV customers for a total of more than one million.

Comparisons will get tougher with BT Sport passing its first birthday, but analysts at Bank of America Merrill Lynch are still expecting an increase of more than 7 per cent in consumer revenues, which are forecast to reach £1.06 billion in the second quarter.

Thursday’s second-quarter results are forecast to show pre-tax profits of £646m, up 6 per cent on the same period a year earlier. BT’s biggest earner is Openreach, its infrastructure division, followed by the group’s business and global services divisions.

“The story at the moment is the consumer market, but we should not confuse that with where the majority of the revenues come from,” Patterson said.

Analysts at Berenberg say the consumer arm likely added 114,000 households during 
the quarter, more than two-thirds of the total market. But some of the enthusiasm around this has been tempered by last week’s unfavourable ruling out of Europe on BT’s exemption from pension protection payments dating back to 2009.

Analysts at Morgan Stanley cited “deepening pension liabilities” as one reason for downgrading the stock on Friday, along with intensifying competition in the broadband market. They also suggested that BT may bid “aggressively” for better Premier League coverage when the next round of rights come up for auction in the first quarter of next year.

The group spent £738m over three years for 38 live Premier League matches per season, plus £897m for exclusive rights to the Champions League and Europa League, and £152m for exclusive rights in the Aviva Premiership.

The “historic” Scottish Rugby sponsorship deal announced in May is thought to have cost BT about £20m.

The deal also includes the naming rights to Murrayfield Stadium, though BT has opted to simply append its own name to the ground.

“I am really pleased with how it has started and the way we are working collaboratively on this project,” Patterson said.

“So many sponsorship deals are just about putting your name up there, and that’s it. This is very different. This is a relationship that goes right into the grass roots of rugby.”