Charles Stanley downplays importance of Premier League rights for Sky

6th Feb 2015 10:52

Sky was in focus on Friday as the auction for Premier League rights kicks off, though Charles Stanley said it was "sanguine" about the possibility of rival BT coming out on top.Friday's auction covers the three seasons starting from 2016/2017. Sky currently shows 116 matches each season at a cost of £760m per annum covering the three seasons from 2013/2014.Ahead of the results, which expected a few days after the auction, analyst Sam Hart predicted "aggressive bidding" from BT Sports, "so consider the most likely outcome to be for Sky to be awarded a lower number of games at a higher average cost per game".However, such an outcome should not deter Sky investors too much, just as long as the company wins a package or packages containing the more popular games with bigger teams at better times, he said."In our opinion, the importance of Premier League football rights to Sky's business model is overestimated by investors," Hart said."Whilst Premier League football can clearly be a key factor in the decision to take up a Sky subscription, we highlight that Sky Sports customers watch a wide variety of sports and that Sky also attracts many customers who do not subscribe to a Sky Sports package at all. The BT Sport proposition remains much narrower than Sky Sports and should probably be viewed as a supplement to a Sky subscription rather than a substitute."Charles Stanley maintained its 'accumulate' rating on Sky after the company released interim results this week that were at the top end of market expectations.However, Hart did admit that the imminent results of the Premier League rights auction "raises the possibility of short-term share price volatility".Sky was down 0.9% at 951.5p by 10:49.