In a move which could have huge implications for the state of sports broadcasting in the UK, BT is reportedly looking to offload BT Sport.
According to The Telegraph, BT has opened talks with Amazon, Disney, DAZN and others to sell a stake in the sports broadcaster. The report notes that the operator has appointed investment bank Lazard to explore a partial sale.
BT is in the process of rapidly expanding the UK’s fibre network, and is seeking additional funding in order to ensure that it can hit its targets of building fibre-to-the-premises connections to 20 million homes and offices by the mid-to-late-2020s.
The source cited by the Telegraph’s report said that DAZN was ‘most keen’ on seeking a deal for BT Sport, while there is also said to be interest from private equity partners such as CVC and Silverlake.
Additional insider sources at BT said that the operator carried out an internal review which said that sport was not the best use of its own capital. The broadcaster has reached profitability since its 2012 launch, but the report goes as far as to claim that BT Sport’s future will depend on whether it can agree a deal with a potential partner.
The report goes on to state that BT is keen to retain a stake in the broadcaster, but the sale would include the BT Sport brand, its rights agreements and its high-tech studios at Queen Elizabeth Olympic Park in London.
Looking at the report, analyst Jefferies said that while BT Sport “was initially pivotal to stabilising the consumer retail business,” it has in recent years “struggled to define its value contribution” as rival Sky has switched to a less aggressive broadband strategy. BT Sport, and access to its football rights, was initially offered as a free add-on for BT Broadband subscribers at a time when BT was looking to re-establish itself as an ISP.
The analyst goes on to note that the “direct BT Sport customer base is in sharp decline” and, as a result, it is “no longer needed as BT’s consumer product improves.” BT Sport’s direct base has declined from a peak of 3.5 million subscribers in 2016 to 1.6 million subscribers in 2021.
Jefferies concludes that BT’s consumer business is focused on the Openreach expansion and growing its retail business along with its mobile business EE.
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