BSkyB pays heavy price for Champions League loss

Shares tumbled more than 10% after it suffered its first major rights auction loss to once-staid telecoms company BT

Bayern Munich’s Arjen Robben is seen celebrating with the trophy after defeating Borussia Dortmund in their Champions League Final.  For BSkyB, the loss raises the likelihood that it will have to pay more for future content deals, including the next Premier League auction which is expected to be  held in 2015 for the three seasons from 2016. Photograph:  Reuters/Phil Noble

Bayern Munich’s Arjen Robben is seen celebrating with the trophy after defeating Borussia Dortmund in their Champions League Final. For BSkyB, the loss raises the likelihood that it will have to pay more for future content deals, including the next Premier League auction which is expected to be held in 2015 for the three seasons from 2016. Photograph: Reuters/Phil Noble

Mon, Nov 11, 2013, 19:39

BSkyB saw more than £1.5 billion wiped off its stock market value today after Rupert Murdoch’s pay-TV group was beaten at its own game with the loss of Champions League soccer rights.

Shares in the British group, which had previously seen off three major challengers to its dominance of the home movies and sports market, tumbled more than 10 per cent after it suffered its first major rights auction loss to once-staid telecoms company BT.

The 168-year-old former state telecoms group agreed to pay £900 million, or more than double the previous contract with BSkyB and ITV, to add mid-week ties featuring top European teams such as Barcelona, Manchester United and Bayern Munich to the English Premier League matches it already shows.

For BSkyB, the loss raises the likelihood that it will have to pay more for future content deals, including the next Premier League auction which is expected to be held in 2015 for the three seasons from 2016.

It also leaves BSkyB suddenly looking vulnerable in a market it helped to build.

“It is hard to see how this does not signal a British crossing of the Rubicon and the end of peaceful co-existence in the UK telecom and TV worlds,” analyst Robin Bienenstock at brokerage Bernstein said.

The deal could be bad news for armchair sports fans who will likely pay a higher price to watch teams like Manchester United and Arsenal, as BT is expected to charge subscribers for Champions League coverage.

One option would be to set up a premium sports service to carry the matches.

It is, however, good news for soccer clubs which will benefit from the increased prize money passed down by the broadcaster, at a time when they are facing regulatory pressures to curb their losses or risk exclusion from European competition. – (Reuters)

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