BT enters exclusive talks with Discovery to create sports joint venture: reaction

BT is locked in exclusive talks with Eurosport owner Discovery to create a joint venture that will revive the fortunes of its BT Sport division.

The two sides are looking to create a 50/50 joint venture, with negotiations expected to conclude in the next few months.

The telecoms giant announced a review of its sports division in April last year, having ploughed billions into sporting rights including the Premier League and Champions League.

BT told investors: “The new combined business would remain committed to retaining BT Sport’s existing major sports broadcast rights while BT Sport customers would get access to Discovery’s sport and entertainment content, including the discovery+ app.”

Telecoms giant BT announced a review of its sports division in April last year, having pumped billions into sporting rights.

The group added that it has also reached an agreement with Sky for a new longer-term reciprocal channel supply deal that will run until 2030.

It came as BT revealed that revenues and profits dipped in the nine months to the end of 2021.

Revenues came in at £15.7 billion, down 2 per cent, with pre-tax profits 3 per cent lower at £1.5bn.

There were hits to the group’s global and enterprise divisions but its Openreach broadband services saw an increase in sales. Bosses said the full-fibre broadband rollout across the UK was rolling ahead at pace.

Over the three months to the end of 2021, full-fibre services reached 6.5 million homes, including two million rural premises, with 50,000 households added every week.

Chief executive Philip Jansen said “BT has had a good quarter with encouraging market share performance, and we continued to make significant improvements in customer service, although revenue from our enterprise divisions was softer than we expected. We had another record-breaking quarter on our full fibre build.”

He added: “Today sees two important strategic partnership announcements on how BT moves forward in the fast-evolving content and TV business.

“The agreement in principle with Sky will provide our customers more choice and more flexibility for the next decade. Separately, we are excited at the prospect of a new joint venture between BT Sport and Eurosport UK as we enter into exclusive discussions with Discovery.”

The group’s 5G high-speed mobile rollout increased and now covers more than 40 per cent of the UK population.

Sophie Lund-Yates, equity analyst at financial services group Hargreaves Lansdown, said: “BT is making tracks to improve its content position, which in today’s climate is no bad thing. That said, there’s an argument that sport is a lot more sheltered from changing media habits than other mediums, so while BT can’t rest on its laurels, it has a bit more breathing room. BT Sport is a genuine asset.

“It’s disappointing to see other areas of the business looking less bright as Covid disruption and supply issues continue. The telecoms giant is weighed down by a number of legacy products that have been falling out of favour for a while.

“The issue with being an internet or phone service provider is that the main differentiator on product, is price. That’s a tough place to be,” she added.

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