BT Group (BT) has won the broadcast rights for Europe's largest soccer tournament for a second time, but the heavy price for a relatively small victory still leaves it with a fierce battle for pay-TV customers in Britain.
The U.K.'s biggest telecoms, broadband and pay-TV group saw off competition from Rupert Murdoch-backed Sky plc (SKYAY) and a series of smaller rivals to clinch the £1.18 billion ($1.47 billion) deal Monday, which gives it the broadcast rights for UEFA Champion's League Football for another three years. The £394 million annual cost is a 30% premium to the price it paid three years ago.
Broadcast rights costs for UEFA Champion's League Football have nearly tripled from where they were before 2013, when BT first made waves with its entrance into the pay-tv space. In the 2010 to 2013 period, both Sky and ITV (ITVPF) shared the UEFA rights while the cost was set at just less than £400 million for the entire three year period.
BT originally took a gamble on pay-tv as part of an effort to fend off increasing competition in the home broadband market, by offering sports television content in a bundle with broadband and telephone subscription.
The expansion helped to alter the narrative around BT stock, shifting it from one of a company in long term decline, to one that had 'growth story' behind it while helping fuel a multi-year rally in the share price.
While the Brexit vote, an accounting scandal and pressures on international revenues brought an end to the rally of the share price, the pending merger between Sky and Twenty-First Century Fox (FOX) could be about to obliterate whatever else might remain of that positive narrative surrounding BT.
