[Sport] BT opens talks over potential sale of sports broadcasting business

[rlex]

 Please use the sharing tools found via the share button at the top or side of articles. Copying articles to share with others is a breach of FT.com T&Cs and Copyright Policy. Email licensing@ft.com to buy additional rights. Subscribers may share up to 10 or 20 articles per month using the gift article service. More information can be found at https://www.ft.com/tour.
https://www.ft.com/content/80c79e49-3f9b-4ca9-866c-9f39f38683c1

BT has opened talks with a number of potential investors as it considers a sale of its sports broadcasting operation, looking to focus on its core broadband and telephony business and blow the whistle on the content business.

The telecoms company has appointed investment bank Lazard and held initial talks with companies including Dazn, Amazon, Walt Disney and private equity companies over a potential investment in the business, said a person with direct knowledge of the situation.

The move could encompass a full disposal of BT Sport, forming a joint venture or partnership with a media business, or selling a stake in it to bring in outside investment.

Discussions are still at an early stage with a number of partners, said multiple people with knowledge of the process.

News of the talks was first reported by The Daily Telegraph. BT declined to comment.

The move reverses BT’s strategy of building a sizeable presence in the sports market over the past decade to take on Sky, which had encroached on its core broadband business. The company is instead looking to revert to a role as an aggregator of content, offering a suite of apps, including Sky, Netflix and Amazon Prime, through its BT TV service.

Please use the sharing tools found via the share button at the top or side of articles. Copying articles to share with others is a breach of FT.com T&Cs and Copyright Policy. Email licensing@ft.com to buy additional rights. Subscribers may share up to 10 or 20 articles per month using the gift article service. More information can be found at https://www.ft.com/tour.
https://www.ft.com/content/80c79e49-3f9b-4ca9-866c-9f39f38683c1

BT has reduced operating costs at BT Sport in recent years and the unit breaks even within the BT Consumer division but the telecoms company has decided to consider options for the media business as it looks to focus on fibre investment and building its 5G network.

The disruption caused by the Covid-19 pandemic, which has had a knock-on effect on live sport, has also contributed to the review.

BT Sport could be a valuable asset for a media company looking to acquire an established presence in the UK market, including studios and millions of existing customers. Although it operates as a TV channel, BT Sport has increased its role as a streaming platform by introducing monthly passes to watch games on its app to non-BT customers over the past year.

Dazn, the sports streaming service that would be seen as an obvious buyer for the business, and Disney, which owns US sports channel ESPN, both declined to comment. Amazon, which streams tennis and a small number of Premier League games in the UK, was not immediately available to comment.

BT has spent billions establishing itself in the broadcasting market as it transformed BT Sport into the second-largest player in the UK by winning the rights to Premier League football games, rugby union and niche sports including Australian Rules Football and UFC fighting. It landed its biggest blow when it won the exclusive rights to Champions League football in 2013.

That fuelled a sharp rise in the value of sports rights — with those for covering the Premier League almost trebling between the 2009 and 2017 auctions. But the climbing cost left BT, which initially offered BT Sport for free to its broadband customers, nursing heavy losses. Sky and BT subsequently signed a cross-licensing deal to carry each others sports channels.

The push into sports was a key pillar of Gavin Patterson’s growth strategy when he was chief executive but the media business has become less prominent since Philip Jansen took over, with BT’s consumer business less willing to overpay for sports rights and the company focused on expanding its full-fibre network.

This is the latest example of a telecoms company pulling back from the content market, having struggled to make the convergence of media and connectivity pay off.