BT has signed a deal with US media company Warner Bros Discovery to create a joint-venture pay-TV sports business that will own rights to sports including the Premier League, Champions League and Olympics, valued at up to 633 million The telecom operator will bring pounds together.
In February, BT entered exclusive talks with the US firm to merge BT Sport with Discovery-owned Eurosport, which broadcasts a wide range of sports including tennis and cycling and holds the pan-European rights to the UK Olympics.
“We have completed the sports joint venture with Warner Bros Discovery to enhance our content offering to consumers and align our business with a new global content powerhouse,” said Philip Jansen, Chief Executive of BT.
Under the terms of the 50:50 joint venture, operated by Warner Bros Discovery, BT will receive £93m in installments over three years from the closing of the transaction.
BT will also be paid up to £540m based on the operation’s performance over four years. This could pay off sooner if either the £540m performance cap is reached or Warner Bros Discovery triggers a call option to take full control.
The two companies said the BT Sport and Eurosport brands would initially both continue to operate in the UK market “before being merged under a single brand in the future”.
“Our growing portfolio of premium entertainment content promises consumers a richer and deeper content offering that not only delivers greater value from their subscriptions, but brings sports to a broader entertainment audience,” said Andrew Georgiou, President and CEO of Warner Bros Discovery Sports Europe .
BT has spent billions on sports rights to fuel the growth of BT Sport since it was formed a decade ago to stem the loss of millions of broadband customers lured by offers from 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 .
“As a global sports and entertainment broadcaster, Warner Bros Discovery is the perfect partner to work with us to take BT Sport into the next phase of growth,” said Marc Allera, Chief Executive of BT’s Consumer Division.
BT, which had to seek Premier League and Champions League approval to push through the change of ownership, has also extended a reciprocal channel supply deal with Sky, which is vital to its sports broadcasting business, until 2030.
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