UBS argues that BT Group (LON:BT.A) and Sky (LON:SKY) now have little incentive to bid aggressively for the next auction of Premier League broadcasting rights next year, Proactive Investors reports. The comments came after the two London-listed rivals inked a deal last week which will see them sell their channels to each other’s platforms.
BT’s share price slipped into the red in yesterday’s session, shedding 0.79 percent to close at 275.35p, underperforming the broader UK market, with the benchmark FTSE 100 index adding 0.62 percent to 7,537.01 points. The telco’s shares have lost just under a quarter of their value over the past year, as compared with about a 7.5-percent rise in the Footsie.
UBS weighs in on BT-Sky deal
BT and Sky announced a deal last week to sell their channels to each other’s platforms, with the new services are expected to be available to customers from early 2019. The agreement means that the former telecoms monopoly’s live UEFA Champions League and Premier League football will be made available on its rival’s platform.
“The tender for the next cycle of Premier League rights (2019/20 to 2021/22) has just been issued with the auction expected in February 2018, and we think consensus is factoring in inflation of up to +40 percent,” analysts at UBS commented yesterday, as quoted by Proactive Investors. “However, with this reciprocal content deal, we think there is limited incentive for either Sky or BT to bid aggressively in the auction.”
Lower risk for BT
The broker further reckons the content deal with Sky significantly reduces the risk around the Premier League rights auction for BT.
“With BT now having access to an improved content offering, we think its triple-play offering will be more competitive versus both Virgin Media and TalkTalk,” UBS said, as quoted by the newswire.