BT open to wholesale sports deals with Virgin, Talk Talk

BT Retail CEO Gavin Patterson said the firm was still open to doing wholesale deals for its forthcoming sports channels with Virgin Media and Talk Talk, but stressed its strategy wasn’t dependent on it. 

Speaking at a BT Sport launch event in London this morning, Patterson said that talks were ongoing with Virgin and would “hopefully continue” in the coming weeks, but claimed it was difficult for the cable TV rival to do a “value proposition” until BT was able to announce details of its sport offering.

“We’ve had similar discussions with Talk Talk as we have with Virgin. Philosophically we’re not against, wholesale, we’d be open to it, it’s really about value – what our perception of the value of it is, and what their perception of the value is, and there’s a gap at the moment,” said Patterson.

Asked whether he could imagine a point where BT would simply walk away from wholesale discussions he added: “Our strategy is not dependent on wholesale. It’s not completely within our control – it’s whether or not we can find the right valuation between us and others. We couldn’t rely on it in that respect, so we’ve built a strategy, we’ve built a business plan that doesn’t necessarily depend on us wholesaling this.”

At the BT Sport launch, BT announced details of its lineup of three new sports channels, which will go live at the end of the summer. BT Sport 1, BT Sport 2 and the recently acquired ESPN will be made available free of charge to BT broadband customers.

The channels will also be available via the Sky and Freesat platforms to non-BT broadband customers for £12 per month in standard definition and £15 in HD. However, customers will only be able to buy access direct from Sky, but must contact BT to receive the channels.

BT internet and BT Sport channel subscribers will additionally be able to also access the new channels via new apps for iOS and Android devices and from their computer’s web browser – though viewers cannot opt to pay for OTT app access alone.

“Is this a BT vs Sky fight? It’s not as simple as that. What we’ve done with this strategy is to recognise that there are some customers who are very committed to their Sky TV and we’re not asking them to change. They will be able to get access to BT Sport on a Sky EPG, and if they’re a BT broadband customer, as I say, it will be free,” said Patterson.

Overall he estimated that Sky’s spend on both content rights and overheads for the sports output would come to around £1 billion over the next three years – though he said that the move was part of a long-term plan to drive uptake of BT’s superfast broadband and bundled TV-phone and broadband options.

“You’ve got to look at it in the whole of the consumer business. So it’s an investment, it allows us to expand the footprint of fibre, because it’s a reason for people to choose fibre. We’re confident over the medium term that this will increase both the revenues and the profits of the consumer business,” said Patterson.