Broker snap: UBS trims BT forecasts despite UEFA win

11th Nov 2013 09:50

UBS has maintained its 'sell' rating for BT after the company won the exclusive rights to the UEFA Champions League and UEFA Europa League, raising concerns about the price it paid to secure the deal.BT is paying £299m a year for three seasons for the UK TV live rights to the tournaments, the first time such exclusivity has been given to one broadcaster; BSkyB and ITV shares the rights currently. The bank said that the company is taking market share but at a large cost, with £299m representing 130% inflation and 20% higher than the cost of the Premier League rights."In our October 23rd survey we highlighted the need for BT to purchase more content as the addressable market of BT Sport was small in our view. "UEFA Champions League will bring share but comes at an even larger cost than the Premier League (£740m) but most important of all means a response from Sky is inevitable in our view."UBS believes that content inflation is now a "significant risk" and said it expects Sky to "hit back via DSL and fibre price cuts".The bank's target price for BT has been trimmed from 310p to 290p after it made reductions to near-term earnings forecasts."All UK Telcos will suffer if Sky cuts broadband prices," the bank said.BT was trading 0.32% higher at 373.3p in morning trade on Monday.BC