When BT spent more than £700m on broadcast rights to 38 Premier League football matches earlier this year, many thought they’d gone loopy. But it seems bosses have not been deterred: they’ve now splashed out a further £152m on exclusive broadcast rights for Premiership Rugby matches in the 2013-2014 season. The telecoms giant is describing the deal as ‘ground breaking’, and will have the rights for four years. Hey, it’s worth a try, right?
Getting the deal signed is a coup for BT, as it pinches dollars from Rupert Murdoch’s BSkyB, which previously held the contract. Rupert Murdoch won’t want to lose out on precious revenues in the UK, and BT’s win on the rugby pitch will no doubt jolt him into action to protect those previous pennies. BSkyB was basically built on the strength of the sports broadcasting market and execs will not want to see that core business eroded. Witness a major media battle beginning to unfold…
Furthermore, matches played by any Aviva Premiership Rugby clubs in European competitions from 2014 will be BT’s for the taking as well, for at least the following three years. All things considered, the deal is pretty extensive and gives BT much greater exclusivity than on the football side of things, where BSkyB still has the lion’s share of rights.
So, why so much sport? Well, BT has spent several years trying to diversify its brand into TV and broadband internet with BT Vision. Competing with Sky and other major broadcasters on the lucrative sports broadcast market could be seen as a long-term investment, even if BT is paying over the odds in the short-term. Oh, and one other thing that BT Vision's CEO Marc Watson pointed out in a statement: ‘Rugby Union is entering a thrilling phase with the World Cup being staged here in 2015 and rugby returning to the Olympics in 2016.’ Yeah, that’s going to pull in some serious viewing figures.
Watson added that ‘BT is serious about sport,’ (we can tell), and given its vast communications infrastructure and growing share of the broadband market, we can see the firm making decent progress in this field.