BT could lose a quarter of a million on Premier League TV gamble

BT Vision’s purchase of the rights to 38 live Premier League matches over the 2012/13 season is predicted to only return around £500 million in revenue, just two-thirds of the telecommunications company’s investment.

A bold £3 billion bid had initially been made by BT Vision for the rights to broadcast all top flight English football, but in the end BSkyB secured the remaining 116 games in a £2.2 billion deal.

Chief executive of BT Vision, Mark Watson, described the deal, which will last for three years until 2013, as “the largest thing we have done in television to date”.

The acquisition of live football rights is, according to the Telegraph‘s Katherine Rushton, a “calling card” designed to attract users to BT’s broadband services, and deal with the competition for internet and telephone services from Virgin Media and BSkyB.

However, writing for Newsline, David Hellier, the deputy editor of City AM, expressed concerns.

“Building a pay television platform in the UK, as others have found, is a hopeless task without an offering of top quality live football.

“BSkyB has always been the dominant force in sports programming and others have only been able to chip away at the fringes. ITV Digital’s foray into live sports rights was a disaster, as was Setanta’s. The Irish television operator ended up paying too high a price for the rights and in the end could not fulfill the deal.”

With an outlay of £738 million for 114 matches over three seasons, fears have also been expressed to the Telegraph by analysts at Espirito Santo. They believe that BT Vision’s entry into the live football market has come at a high price.

Espirito Santo also pointed out that another £95 million would have to be spent by the company on television production across the length of the contract.

Hellier added: “It would be to BT’s advantage, for example, to withhold the 38 matches from its rivals. But in reality this would prove too expensive, since it paid out £738 million for the rights and would nowhere near be able to recoup that cost just from its own subscribers even if the numbers go up substantially.”

It remains to be seen whether the move will bear fruit for BT Vision, as the competition between the “triple play” companies, BSkyB, Virgin Media and BT Vision, increases.