Broker snap: BSkyB should aim high in soccer TV rights bid

16th Jan 2014 14:53

Satellite broadcaster BSkyB should go all out to trounce arch-rival BT in the next auction of UK Premier League soccer TV rights, according to Credit Suisse.Credit Suisse said it believed the best way BSkyB could keep a lid on the long-term cost of Premier League rights is increase its control and force BT out of the market.BSkyB has most of the Premier League rights under the present deal, holding 116 matches against BT's 38 games. The pair paid a total of more than £3bn for the rights, of which BT's share was £738m.But BT, which launched two new sport channels last year in the UK, dealt BSkyB a blow when it paid nearly £900m for a three-year exclusive deal to show the European Champions League and Europa League from 2015.Credit Suisse said BSkyB may pay £1.6bn for six batches of Premier League rights rather than £1.2bn for five in the next auction, which is due next year but reportedly may be brought forward by six months to later this year."The rational strategy for Sky is to acquire six packs, take the short term hit to earnings, but then reap the longer term benefits from reduced competitive intensity," the broker said.Credit Suisse added that the main reason for BT to try to launch a knockout bid would be to force BSkyB to agree a wholesale deal allowing it to show more Sky Sports channels.BSkyB has so far refused to let BT show Sky Sports on a commercial basis, but BT currently screens Sky Sports 1 and Sky Sports 2 under a so-called "wholesale must-offer" deal imposed on BSkyB by regulator Ofcom.Shares in BSkyB fell 23.5p to 846p in mid-afternoon trading in London, while BT dropped 3.7p to 382.3p. PW