Home News Forum Articles
  Your number one Virgin Media Cable, Computer & Internet Resource - Welcome back on Join Join
You are here You are here: Home | News Articles
Navigation
Amazon
Adverts

Market-watchers concerned at consequences for VM after football TV rights auction

# Jun 20, 10:32 AM by Chris T

Stock market analysts have sounded a warning after Sky and BT bid more than £3 billion for the rights to show English Premier League football from 2013 to 2016.

It’s not yet clear how much Sky will try to charge Virgin for the rights to the games it holds, but having spent £2.3bn on securing 116 games in each of the three seasons up for grabs, the satellite broadcaster is bound to want to do all it can to earn that investment back.

However the investment banker Goldman Sachs cautioned investors to pay special attention to the surprise winner of the other 38 matches per season – BT.

A spokesman said: ““We believe BT’s decision to invest in high quality UK football rights could lower product differentiation between BT and VMED (Virgin Media) and also increases the risk of a loss of price rationality in the UK triple play market.

“The long-term impact of BT’s strategic shift on VMED is hard to gauge and depends in part on the terms of potential wholesale agreements. However, given this uncertainty we no longer expect VMED to re-rate to a growth multiple near-term and we downgrade to Neutral from Buy.”

The purchase gives BT the ability to create a new channel as a vehicle for its football coverage. This channel will be broadcast as part of the company’s own BT Vision service and available for other operators – essentially Sky and VM – to broadcast. But that offers BT the chance to plaster its own branding all over their subscribers’ TV screens while they are watching one of the games it has rights for.

Will the increased exposure BT Vision gets as a result of this, cause Sky and VM subscribers to switch to BT instead? BT is clearly hoping so. Only time will tell.

Forum Search