BT
- BT Sport launched in 2013
- Discovery bought Eurosport in 2016
- DAZN had been frontrunner for deal
Discovery and BT have entered into ‘exclusive discussions’ regarding a joint venture that would combine the broadcast assets of Eurosport and BT Sport, ending the prospect of a full takeover by DAZN.
The proposed venture could be operational by the end of 2022, with both companies owning an equal stake in a business armed with a vast portfolio of premium sports rights. This includes the Olympic Games, Premier League soccer, Uefa Champions League, Premiership Rugby, tennis Grand Slams, and the winter sport world cup season.
The deal would also combine both broadcasters broadcast innovation and digital capabilities. BT Sport has purpose-built studios at the former London Olympic Park, while Eurosport has pioneered augmented reality (AR) studio technology in the form of ‘The Cube’.
Speculation that a deal was imminent had intensified in recent days with reports BT had approached its rights partners, including the Premier League and Uefa, and its carriage partners, such as Sky and Virgin Media, who needed to consent to any transaction.
“We are excited about this opportunity with BT Group to offer consumers a stronger and simplified combined sport offering in the UK and Ireland, and, more broadly, to advance our strategy of bringing sports and entertainment to more consumers on the platform of their choice,” said JB Perrette, president and chief executive of Discovery Streaming & International.
“We are aligned with BT Group on a shared vision to maximize the value and appeal of our respective UK sport assets, and we look forward to concluding a deal in the coming weeks.”
“The proposed joint venture with Discovery, Inc. would create an exciting new sports broadcasting entity for the UK and would act as a perfect home for our BT Sport business,” added Marc Allera, chief executive of BT Consumer. “With a shared ambition for growth, as well as the combination of our world class sports assets along with Discovery’s premium sports and entertainment content, our customers will benefit from even more content in more places.”
BT has been eager to divest its interest in the sports broadcast market to focus on its core business, as well as investing in fibre and 5G infrastructure. DAZN had been considered the frontrunner for the business as it would have given the streaming service a pre-existing customer base and, crucially, the Premier League rights.
However, the two parties had difficulties in securing guarantees that each side would protect the other’s interests and ultimately the deal became too complex to complete. Although this potential route to UK expansion has been blocked off, DAZN is known to be keen to enter the UK market and will keep an eye open for future opportunities – perhaps the next Premier League rights cycle.
“We remain fully committed to growing our business and investing in the UK, as you will see in the near future,” said Kevin Mayer, DAZN chairman. “On this occasion however, the deal for BT Sport became uneconomical for DAZN. However, we respect that BT chose a different strategic path, and wish BT, BT Sport, and Discovery all the best for the future.”
The fact that BT opted for a less clean break than an outright sale suggests it wanted to retain a degree of control over its broadcast offering for at least the short term. BT customers will retain access to the same range of sports coverage they are used to, and will also receive Discovery’s portfolio of sport and entertainment content, including the Discovery+ streaming service. Eventually, BT could sell its stake in the joint venture.
“BT’s move into sports broadcasting has always divided opinion amid the high spend needed to acquire football rights,” said Kester Mann, an analyst with CCS Insight. “As the operator ups its focus on networks and connectivity, particularly its growing ambition in full-fibre, an eventual sale of any joint venture with Discovery could be the likely end-game for the operator.
“Initially, BT’s push into sport was successful in countering Sky’s bullish move into home broadband more than a decade ago. But it has failed to help turn around a continued decline in average spend and the unit was hit hard by the pandemic due to the closure of pubs and clubs.”
