Originally Posted by mlt11:
“I think BT broadly has 3 possible strategies it could follow:
1) Status Quo:
- Continue with current level of PL rights
- Continue with same strategy - ie free with BT broadband + standalone relatively cheap BT Sport subscription
- Pros: Strategy appears to be working very well - BT Consumer business achieving major turnaround at relatively low cost
- Cons: Limited scope for further long-term growth
2) Buy majority of PL rights including Sunday 4pm:
- Become the undisputed number 1 in Pay TV football
- Inflict serious damage on Sky business - both TV and broadband/phone
- Pros: Achieve huge step change in BT TV and BT Sport businesses; opportunity for massive growth
- Cons: Huge short-term cost - may mean substantial losses short-term; uncertainty how things would play out in medium term
3) Add one more PL package (but not Sunday 4pm):
- Would give an SS / BT split of 90 / 64
- Remain in number 2 Pay TV sports position; but a much stronger, closer number 2 to Sky Sports
- Pros: Would pave the way for continued, steady, incremental growth
- Cons: Significant additional cost but return is unclear - see below:
I actually think that Option 3) begs the most questions. It may seem the obvious answer - ie steady progression without having to spend an absolute fortune. But the issue is that it would still leave BT Sport in the clear number 2 position. This then leads to the following questions:
- With a 90/64 split, would there be a significant number of Sky Sports cancellations?
- If few SS cancellations, BT Sport remains a secondary subscription (***)
- How many extra people will subscribe for 64 PL games, as a secondary subscription, who wouldn't subscribe for 38?
- How much higher subscription price can BT charge for 64 PL games, as a secondary subscription, than they could for 38?
- Is there any incremental benefit to the broadband / phone business - ie how many would be tempted to get BT broadband / phone by 64 PL games who weren't tempted by 38?
I'm reminded of the ESPN document we saw at the time of BT's takeover which said the optimal position was for ESPN to have one PL package rather than two - because one brings in the diehards who want every TV game - whereas two costs twice as much but won't generate twice the revenue.
(***) Remember the Setanta submission to OFCOM which stated that "almost nobody" subscribed to Setanta who didn't also subscribe to Sky Sports. Of course BT has the "free" BT Sport with broadband / phone side of the business which Setanta didn't have - but the principle is still relevant to the "Pay" side if you are in the number 2 position - ie you are asking people to pay a second subscription - unless you are a close enough number 2 to get large numbers to cancel Sky Sports - which was the first question above!
My own view is that BT will go for Option 2) - and I think the CL is a huge pointer in that direction. But this post has gone on long enough - so I'll stop there - for now!”
Broad consensus here that you're on the right lines here. After all, you don't blow hundreds of millions on the CL/EL deal if you planning to coast along as number 2. Option 3 remains a viable fallback.
But Sky are not stupid. They know what's coming. Look at the marketing campaign. "More of the games that matter."
Equally, BT are starting to feel some regulatory heat and corporate questions about their spending on sport. They could blow Sky out by winning all packages but I'm not sure it's in BT interests.
The battlegrounds are the first picks and the package that controls the others. I could easily see BT trying to blow Sky out on those. And with the significant streamlining going on at Sky, I'll bet they'll try and focus their fire too. Perhaps key packages rather than numbers will be more important this time.
Also, the relationship between Sky and the PL is much stronger and longer term than it ever was with UEFA. Scudamore is no stranger to Sky towers. Look how much shameless brown nosing SSN do towards any Premier League initiative and the easy ride they gave Scudamore over his emails. Sky will not be dumped.
Which begs a question. .
What is the minimum that BT need to take no. 1 status? They won't get everything after all.
Is it all PL first picks and parity of numbers?
Do they need one mainstream summer sport, eg cricket?