By David Owen
November 1 – Stock market investors seem to have given a thumbs-up to BT’s strategy of acquiring highly compelling sports content, such as live rights to Barclays Premier League football matches, after yesterday’s publication of the telephone company’s first quarterly financial results since the launch of BT Sport on August 1.
By late afternoon UK time, BT Group shares were up just over 2% on the day at 377p. This compared with a 0.7% decline for the benchmark FTSE 100 index – and a 0.4% advance for the shares of rival British Sky Broadcasting (BSkyB).
BT, whose willingness to splash £246 million a year for live rights to 38 Premier League matches a season was a major factor in generating a near 70% increase in the value of the league’s live domestic rights compared with the previous deal, said that BT Sport now had over 2 million customers. A wholesale contract agreed with Virgin Media, moreover, took BT Sport’s reach to “around 4 million homes”.
“BT Sport has made a confident start,” said Gavin Patterson, BT’s new chief executive. “It is also delivering for the business.”
The company said BT Sport had a “positive” impact on its line, broadband and TV customer numbers in the quarter – a potentially significant statement for Premier League stakeholders, given that BT’s acquisition of costly sports rights is seen by some as a means to an end – the end being to stop people leaving its broadband service. BT said it added 156,000 retail broadband customers in the period, taking its broadband customer base to “around 7 million”.
The strategy’s cost was most apparent in figures relating to the group’s BT Retail unit. This saw operating costs increase 8% and operating cash flow decrease by 24%, despite a 4% advance in consumer revenue, “driven by 17% growth in broadband and TV revenue following the successful launch of BT Sport”.
The reduction in operating cash flow, to £254 million, “partly” reflected the first of two instalments of “around £120 million” for this season’s Premier League rights.
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