BT enters into exclusive talks with Discovery on BT Sports

Potential joint venture with US pay-TV firm and Eurosport owner is a blow to Dazn, the 'Netflix of sport'

GB About: BT Sport Publish: 02/14/2022 Edit: 02/14/2022 Author: Gardener

DiscoveryBT has entered exclusive talks with US pay-TV company Discovery to set up a joint venture company that will include BT Sport, which owns the rights to sports including the Premier League and Champions League. The joint venture, which BT expects to be operational later this year, subject to regulatory approval, ends nearly a year of uncertainty about the future of the telecoms company's decades-old pay-TV sports operation. Discovery owns Eurosport, which broadcasts a wide range of sports including tennis and cycling, and holds the pan-European rights to the Olympic Games. The decision to join forces with Discovery, which has considered bidding for UK TV rights to the Premier League in the past, comes as a blow to sports streaming company Dazn. Backed by billionaire Sir Leonard Blavatnik, Dazn, dubbed the 'Netflix of sport', has been pushing hard for a deal to buy BT Sport to fuel its growth plans in the UK. "The proposed joint venture with Discovery would create an exciting new sports broadcasting business for the UK and serve as the perfect home for our BT sports business," said Marc Allera, Chief Executive of BT's Consumer Division. "With a shared drive for growth, and combining our world-class sports resources with Discovery's premium sports and entertainment content, our customers will benefit from even more content in even more places." BT seeking Premier League and Champions League approval The telecoms company has spent billions on sports rights to fuel the growth of BT Sport since it was founded a decade ago to stem the loss of millions of broadband customers lured by the offerings of competitor Sky, which bundles internet connectivity with sports and entertainment programming. The company has successfully delivered on its mission despite having just a few million customers and modest profit, and BT is now focusing on its £15billion plans to roll out next-generation broadband and 5G mobile networks across the UK . Dazn said its plans for the UK are ongoing but the deal it has discussed with BT Sport is not commercially viable. "We remain fully committed to growing our business and investing in the UK, as you will see in the near future," said Kevin Mayer, Chairman of Dazn. “However, on this occasion the deal for BT Sport became uneconomic for Dazn. Despite the positive news, BT's shares fell 4% in early trade, making it the biggest drop among FTSE 100 stocks as the company warned of a fall in full-year earnings on the back of a delayed recovery from Covid-19 and ongoing supply chain issues. BT said it has revised its revenue guidance due to a lag in the expected performance of its global and corporate operations, which focus on business-to-business customers, as companies struggle to get back on track. The company said it was suffering from a slowdown in companies' expected business, as well as some supply issues related to the equipment it needs from its own suppliers. "Everyone was hoping that this supply chain issue would be resolved sooner than it is," said Philip Jansen, BT's chief executive. Jansen was asked if he thought his new largest shareholder, activist investor Patrick Drahi, intended to further increase his stake. "We have strong, large shareholders who all support the direction of this company 100%," said Jansen.

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