Fears that media giants BSkyB and BT overpaid in their £3bn Premier League deal sent shares in the pair sharply lower yesterday.
The eye-watering price was much higher than the City had expected and represents a 70 per cent hike on the current partnership with Sky and ESPN.
BSkyB shares dropped more than 7 per cent, wiping £764m from its market value, and BT was nearly 3 per cent lower as investors got their first chance to react to Wednesday night’s deal for domestic live television rights for the three seasons covering 2013/14 to 2015/16.
Satellite broadcaster BSkyB has said it will offset the higher price through savings elsewhere in the business, although its reassurances failed to prevent the shares slide.
Investec analyst Steve Liechti said Sky’s own price was 40 per cent higher than last time and much higher than the 15 per cent increase expected in the market.
He said: “The cost is higher than expected and BT arguably looks a more potent competitor than ESPN, even if we have some doubts over its content strategy and pay TV product performance to date.”
He added there were also long-term questions over “what happens next time” given the benchmark set by the latest rights contract.
Citigroup analysts said that despite Sky’s success in retaining the rights, “there is no doubt this counts as an adverse outcome for BSkyB”.
Long-term Premier League partner Sky paid £2.28bn to secure the rights to show 116 games a season and newcomers BT forked out £738m to gain a 38-game-a-season foothold.
Premier League chief executive Richard Scudamore admitted he was surprised by the final total.
He said the thrilling climax to last season, when Manchester City won the title on the final day, was a significant factor in the recession-busting 70 per cent increase.
BT will launch its own ‘football-focused channel’ through BT Vision, which will offer new interactive features, but they will look to make it available on other platforms.
Sky’s five packages cover matches on Saturday evenings, Sunday lunchtimes, Sunday afternoons and Monday evenings. BT has bought the rights to matches that kick off at 12.45pm on a Saturday and for bank holiday and midweek games. ESPN has one more year remaining on the current deal.