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UPDATE - Manchester United celebrates Premier League TV rights deal

Last updated: 14:28 11 Feb 2015 GMT, First published: 15:28 11 Feb 2015 GMT

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Manchester United shares rocketed following last night’s news that the next three years of Premier League coverage was sold for an eye-popping £5.14bln. 

The football club’s stock (NYSE:MANU) spiked on the New York Stock Exchange, hitting five-month highs,  thanks to bumper TV rights bids from Sky (LON:SKY) and BT (LON:BT). 

From the 2016-2017 season onwards, the Old Trafford club can expect around £155mln in their share of the TV spoils.

Sky shelled out a whopping £4.2bn to maintain a majority share of live broadcast rights, 126 games a season, for the Premier League from 2016-2019. 

BT (LON:BT.A) forked out £960mln for 42 matches per season, 30% up on its current deal. 

The record prices represent a huge coup for the Premier League.

Both sides, Sky and BT, will claim a win; Sky has the best slots and far more games, whilst BT has kept its position in Premiership games stable, and now has those games, Champions League, FA Cup and European leagues to offer.

The difference for the broadcasting rivals is that Sky paid a 69% increase per game, whereas BT only paid 18% more. 

In fact, Sky’s £4.2bn bill means it has effectively forked out 83% more for the same TV rights it currently owns. 

“What has become clear to me is looking at the prices paid, BT did not go for outright victory here,” said Joshua Raymond, chief market analyst at City Index.  

“They paid 30% more than last time to ensure it secured a decent chunk of the coverage but the amount paid by BT does not convince me that they went all out for a big win.” 

“As such, I estimate that Sky has potentially over paid, by roughly £1.2bn, and could have secured the same amount of packages it has won for just over £3bn.” 

Steve Clayton, analyst at Hargreaves Landsdown described the outcome is a painfully won victory for Sky.

“Their 'Must Not Happen' outcome was to lose most, or all of their rights. They have avoided that, but at a dreadful cost.

“BT must be feeling very, very happy with this outcome. Their cost per game is lower than Sky's, and yet they are now able to show a compelling quantity of top flight football.” 

Liberum slashed 40% off its target price for Sky, down to 530p from 850p, and said outcome of the auction raises questions about Sky's future valuation.  

Jerry Dellis of Jefferies said the auction was “sobering” for Sky and said the firm appears to have admitted that dominance in Premier League rights is pivotal to its UK business.

Five packages, or 126 games, went to Sky – including the sought after Sunday afternoon slots. 

BT’s slots, 42 in total, include 32 Saturday evening matches, with the others being Saturday lunchtime and midweek evenings. 

BT shares were 3% higher at 456p while Sky lost 2.6% to 929p. 

 

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