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BT Sports Channel (Part 2)
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mlt11
02-02-2016
Originally Posted by samburrows:
“Barely seem believable actually, particularly the Earnings figures.”

Agreed - must confess I was very surprised when I saw the EBITDA number.

There just have to be significant cost savings being achieved elsewhere within "Consumer" - and Consumer's costs include the charges from Openreach.

But it's entirely possible that that is the case.

I've posted in the past when looking at Sky's results that it's important to understand that about half of the costs of Sky's TV business (ie not talking about broadband / phone) relate to stuff other than programming. That fact takes some digesting. But it's an important fact as it opens up an opportunity for very big cost savings if they can reduce digibox / installation / repairs / customer service / marketing / commission (etc!) costs.

Now I'm sure something similar may well apply to BT's Consumer business. Obviously its cost base will be very different - with TV in its (relatively) early growth stages the main costs will be in connection with the phone and broadband business. But whatever the details are, it may well be that there is big scope for savings and, as I said above, slide 14 of the Presentation confirms that (without telling us how much relates to Consumer).

In conclusion, the extent to which both Sky and BT can reduce non-programming costs (both within TV and also phone / broadband) will have a big impact on the success of their businesses going forward and will also have a big impact on how much they can spend on programming (including sports rights).
mlt11
02-02-2016
Originally Posted by madmusician:
“Thanks for reporting that, mlt11. Can I ask, is this likely to be a one-off increase or do you think this is sustainable for BT? The reason I ask is that there were impressive results in the quarter directly after the launch of BT Sport, as the 'free sport with broadband' offer generated a number of fresh subscribers, but this was a one-off 'bump' if you like, with results plateauing somewhat afterwards. Is this likely to be repeated?”

It's worth looking at slides 20 and 21 of the presentation:

http://www.btplc.com/Sharesandperfor...316-slides.pdf

Prior to BT Sport's launch in Q2 of 2013/14 the Consumer business’s revenues had been steadily falling (we can see from the slide they had fallen in 4 of the previous 5 quarters – and without checking I think they had been falling pretty steadily before that too).

We then see that the launch of BT Sport immediately leads to a big turnaround – with revenue growth which then accelerates for 4 quarters before then, as you suggested, starting to tail off. However even during that tail off it is still growing – albeit at a slower pace.

Slide 21 gives the details re customer numbers for each segment – we see here that the growth tail off is most apparent in the share of broadband net adds. In contrast TV net adds keep growing at a pretty steady pace (after the one-off exceptional performance in the quarter when BT Sport launched). And on the lines side, the reduction in the rate of losses is entirely sustained.

What will happen this time? We just don’t know but in terms of the overall growth pattern (ie the revenue numbers) it may well be that a similar pattern unfolds.

However even if a similar pattern does unfold the EBITDA number for the last quarter suggests the investment in the CL rights is worthwhile given that the CL rights cost is now fixed for 3 years – so any further revenue growth (even if it is at a lower rate - per the previous pattern) should feed through into higher EBITDA going forward (all other things being equal and subject to my previous caveat about this only being one quarter’s EBITDA number).

Finally we should note that BT’s PL costs will rise by £74m per year from next season – a small number in comparison to the new CL rights cost this season but not peanuts either – so this could make a small dent in what EBITDA would otherwise have been (and subject to other factors – eg price rise for next season).
mlt11
02-02-2016
One final point to add on this:

There is always the unknown “what if” in the sense that we don’t know what would have happened if BT hadn’t bought the CL – it could be argued that it’s possible EBITDA would have been even higher now.

We just don’t know.

However what we do know is that prior to the launch of BT Sport the BT Consumer business overall had been contracting constantly (despite the growth of broadband) for a very long period indeed (ie many, many years) and the launch of BT Sport has coincided with what has been a substantial turnaround.

OK, they could have left it at that and not invested in the CL and maybe EBITDA would have been even higher now. But having turned the business around so much with BT Sport I think it’s hard to argue against what they have now done with the CL - given the results as discussed above.
seagull_Mark
03-02-2016
West Ham v Aston Villa last night got 465,000 and was beaten by Gillette Soccer Special on SSN which got 482,000
mlt11
04-02-2016
Watford v Chelsea - 541,000
Neil_Harris
05-02-2016
Ratings for Man City/Leicester will be very interesting.

In theory it is the biggest game of the season so fat, but with it being up against the six nations, a saturday lunchtime and not traditionally 2 high rating teams, will it be above average viewing figures?
Fieldmouse83
05-02-2016
Originally Posted by Neil_Harris:
“Ratings for Man City/Leicester will be very interesting.

In theory it is the biggest game of the season so fat, but with it being up against the six nations, a saturday lunchtime and not traditionally 2 high rating teams, will it be above average viewing figures?”

I for one could not care less as long as my heroes in Sky blue win ...
casinoman13
05-02-2016
Originally Posted by Neil_Harris:
“Ratings for Man City/Leicester will be very interesting.

In theory it is the biggest game of the season so fat, but with it being up against the six nations, a saturday lunchtime and not traditionally 2 high rating teams, will it be above average viewing figures?”

I doubt with everything mentioned it will get above 700k, if it does it will of done ok but to be honest looking at BT figures recently announced I don't think they will be to concerned.
popeye13
05-02-2016
Originally Posted by casinoman13:
“I doubt with everything mentioned it will get above 700k, if it does it will of done ok but to be honest looking at BT figures recently announced I don't think they will be to concerned.”

I think 700 - 750k average is a good shout. Going for a peak of 1.1m
OMc
05-02-2016
Nick Mullins has just announced that BT will show Six Nations highlights as part of Rugby Tonight.
charlieparr
05-02-2016
Originally Posted by OMc:
“Nick Mullins has just announced that BT will show Six Nations highlights as part of Rugby Tonight.”

Although everyone who watches RT will have had access to live, full match re-run and highlights of all matches at least a day beforehand.
OMc
05-02-2016
Originally Posted by charlieparr:
“Although everyone who watches RT will have had access to live, full match re-run and highlights of all matches at least a day beforehand.”

Yes, it just allows them something extra to talk about on Rugby Tonight.
popeye13
05-02-2016
Originally Posted by OMc:
“Yes, it just allows them something extra to talk about on Rugby Tonight.”

It is kinda huge in Rugby so it makes sense for them really.
OMc
05-02-2016
Originally Posted by popeye13:
“It is kinda huge in Rugby so it makes sense for them really.”

I wonder if it was in exchange for lending personnel to ITV?
popeye13
05-02-2016
Originally Posted by OMc:
“I wonder if it was in exchange for lending personnel to ITV?”

Well BT has a strong partnership with BBC so it may well be via that.
seagull_Mark
07-02-2016
Man City v Leicester 815,000 (peak 1.339 million)
wild_ty
07-02-2016
Good figure for one of the biggest games of the season.
casinoman13
07-02-2016
[quote=seagull_Mark;81433493]Man City v Leicester 815,000 (peak 1.339 million)[/QUOTE

Pretty decent figures, sure BT will be pleased with those, very good peak as well.

Not bad as well considering Liverpool or Man Utd weren't involved.
ep1987
07-02-2016
With regards to the financial results why are Q4 profits always highest and Q2 profits always lowest for BT's consumer division?

All i can think is that costs are higher due to new customers beginning contracts, new technologies (Ultra HD) being implemented, increased ad spending and so on.
popeye13
07-02-2016
Originally Posted by seagull_Mark:
“Man City v Leicester 815,000 (peak 1.339 million)”

Way better than i thought it would be.
Missed the game myself, fell back asleep
mlt11
07-02-2016
Originally Posted by ep1987:
“With regards to the financial results why are Q4 profits always highest and Q2 profits always lowest for BT's consumer division?

All i can think is that costs are higher due to new customers beginning contracts, new technologies (Ultra HD) being implemented, increased ad spending and so on.”

13/14 Q2 had the launch of BT Sport and thus significant start-up costs.

Q2 is also the first quarter when new sports rights costs hit the P&L for the first time - yet the benefit from increased customers / revenues doesn't all come through immediately - it builds incrementally.

Above point applies primarily to 13/14 (new PL contract) and 15/16 (new CL contract).

In 14/15 Q2 profits are lower but it is smoother - fitting in with no significant new rights contract.

Q4 gets higher calls revenues due to winter, less daylight etc - this shows up particularly in 13/14, less so (but still a bit) in 14/15.

On the last point - calls / lines revenue is very, very strong in Q3 15/16 - didn't mention that in above discussion but looking again it is very noteworthy. Line volumes can't explain it so presumably line rental price rise or maybe weather related to some degree with floods?
seagull_Mark
10-02-2016
888,000 for West Ham v Liverpool FA Cup 4 replay last night. Peaking at 1.224 million. Life in the old competition yet.
arunan22
10-02-2016
Originally Posted by seagull_Mark:
“888,000 for West Ham v Liverpool FA Cup 4 replay last night. Peaking at 1.224 million. Life in the old competition yet.”

Or goes to show how big a ratings pull Liverpool are!

Thats actually a ridiculously high figure!
Neil_Harris
10-02-2016
Originally Posted by seagull_Mark:
“888,000 for West Ham v Liverpool FA Cup 4 replay last night. Peaking at 1.224 million. Life in the old competition yet.”

That's bloody good
popeye13
10-02-2016
Originally Posted by seagull_Mark:
“888,000 for West Ham v Liverpool FA Cup 4 replay last night. Peaking at 1.224 million. Life in the old competition yet.”

BT will be very chuffed at that result numbers-wise!

I on the other hand am still fuming we lost
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