BT Group PLC (LON:BT.A) has confirmed it is in early stage talks with potential investors in its sports broadcasting business, following overnight press reports which suggested negotiations were taking place that could lead to a sale of the unit.
The telecoms group is considering the sale as it seeks to focus on its core broadband and telecoms businesses.
Investment bank Lazard had been hired, according to a report in the Financial Times, which added that initial talks have taken place with DAZN, Amazon, Disney and private equity.
Potential deals suggested by the FT include a full sale, a stake sale, or new joint ventures and partnerships.
BT, in a statement, has this morning said: “BT can confirm that early discussions are being held with a number of select strategic partners, to explore ways to generate investment, strengthen our sports business, and help take it to the next stage in its growth.
“The discussions are confidential and may or may not lead to an outcome.”
In London, BT shares rose over 2% following the statement, changing hands at above 164p for the first time since January last year.
BT Sports reportedly costs BT £800m per year. That's insane. No wonder people who work for them have been telling us everything is great and football is still brilliant and totally worth the subscription.— The Tactical Times (@Tactical_Times) April 29, 2021
The deal talks comes in the wake of botched European Super League plans by a group of clubs including the English Premier League's ‘Big Six’ which included assumptions of multi-billion per year broadcast rights, further underlining the escalated costs and increasingly global nature of sports broadcasting along with the trend towards online streaming.
Fast-expanding sports streaming platform DAZN and Amazon Prime already have footholds in European football, with Serie A and English Premier League rights respectively.
It is also rumoured that DAZN could be set to prize away exclusive rights to Matchroom Boxing events from Sky – it is already the global broadcast partner for Eddie Hearn’s Matchroom which promotes high profile world champions Anthony Joshua, Katie Taylor and Canelo Alvarez.
Having recently poached a new boss from FTSE 100-listed Entain, DAZN recently launched a global streaming service, presently priced at around £1.99 per month in the UK, and it was linked in media speculation as a potential partner for the controversial European Super League project.
Amazon Prime has meanwhile edged further into live sports streaming during the pandemic as additional match broadcasts were added to the schedule as fans were prevented from attending live games. It also has several popular sports based ‘docuseries’ including the fly-on-wall seasons with Tottenham, Manchester City and Leeds United.
Disney has quickly become one of the top streamers, accelerated amidst the pandemic, driven by its exclusive content - particularly as it leverages IP from Marvel, Star Wars and classic Disney - though it also separately owns Hulu and, perhaps significantly in regard to BT Sport, the ESPN brand which also provide subscription-based streaming.
“Maybe BT doesn’t think the breakaway European Super League is as dead as it appears to be," said analysts at AJ Bell, saying the broadcaster’s crown jewels are its exclusive rights to the Champions League rather than its Premier League games.
They added: “Bidding for sports rights is an expensive and unpredictable business – securing them can be a big pull for subscribers and advertisers but it involves a big outlay and there is always a risk a rival could gazump you at the last moment – a trick BT itself has pulled in the past.
“Plus at the moment the world of sports and sports rights is in a flux thanks to the pandemic – it’s a very different world from the one in which BT launched as a challenger to Sky nearly a decade ago.
“By selling a bit of the business, and reducing the amount it spends on sport, BT could generate funds to help meet the massive bill it faces for investing in broadband infrastructure.
“After all, most customers would take a more reliable internet service over slightly cheaper access to watching the footy.”
** Updates shares, adds broker comment **