BT Group has agreed to form a new sports joint venture with Warner Bros Discovery in the UK and Ireland.
The telecoms giant confirmed the deal as it also reported that trading is ‘on the right track’ despite a dip in revenues for the past year. In February, BT said it was in exclusive negotiations with the US media giant after completing a lengthy review of its BT Sport operation.
It confirmed it will now form a 50-50 joint venture which will bring together BT Sport and Eurosport.
The venture could see events such as the Olympics, Premier League football, Champions League football, Grand Slam tennis, cycling Grand Tours and Premiership Rugby all on one entity.
BT Sport customers would get access to Discovery Sport’s sport and entertainment content, and vice-versa, including the discovery+ app.
Eurosport, meanwhile, have the rights to the Olympic Games, Grand Slam tennis, cycling Grand Tours and the winter sport World Cup season amongst others.
BT (pic, lead presenter Jake Humphrey left, and pundits Rio Ferdinand, centre, and Joe Cole, right) are set to merge with Eurosport after £540m deal with Warner Bros Discovery was struck
BT Sport (who have the rights to the Champions League, left) customers are set to get access to Discovery Sport’s sport (Olympics, right) and entertainment content and vice-versa
Eurosport, meanwhile, already have the rights to broadcast Grand Slam tennis
BT said the two brands will initially stay separate but will ultimately be brought ‘together under a single brand in the future’.
The London-listed firm said it will immediately receive £93 million from Warner Bros Discovery, and up to £540 million if future conditions are met.
The confirmation came as BT told shareholders it met expectations with a 2% increase in earnings to £7.6 billion for the year to March, as cost savings offset lower revenues.
BT said it will extend its cost savings plans to save £2.5 billion by the end of 2025, amending previous targets of £2 billion in savings by 2024.
Cost reductions have helped the company absorb some inflation pressures, it added.
Revenues for the year dropped by 2% to £20.8 billion, driven by lower sales in its enterprise and global businesses, although the firm benefited from a strong performance by its Openreach network business.
It added that its consumer business, which is focused around the EE mobile brand, returned to growth in the final quarter.
Chief executive Philip Jansen said: ‘BT Group has again delivered a strong operational performance thanks to the efforts of our colleagues across the business.
‘We have finalised the sports joint venture with Warner Bros Discovery to improve our content offering to customers, aligning our business with a new global content powerhouse.
‘Separately, we have strengthened our strategic partnership and key customer relationship with Sky, having now extended our reciprocal channel supply deal into the next decade and agreed a MoU (memorandum of understanding) to extend our co-provisioning agreement.’
Conrad Wiacek, head of sport analysis at GlobalData – a leading data and analytics company – told Sportsmail back in February that the proposal is the first tangible threat to Sky since its inception.
‘Discovery entering into a joint venture with BT Sport ahead of an eventual purchase will not only change the shape of sports broadcasting, it is a legitimate threat to Sky’s dominant market share position in UK and European sports broadcasting,’ he said.
‘Discovery, which already owns the global media rights to the Olympic Games, is now likely to take control of one UK Premier League rights package, as well as exclusive rights to show the UEFA Champions League in the UK worth a combined $1bn (£735m) annually.
It has been predicted that Discovery will now try and purchase rights to the Premier League
The combined BT/Discovery/Eurosport offering could be a genuine threat to Sky Sports
‘With Comcast now owning Sky and Discovery taking on BT Sport, the UK may become the first battle ground in the US giants’ plans to become the dominant European sports broadcaster.
‘With Sky having an established presence in multiple European territories already, and BT Sport owning the Champions League rights in the UK until 2024, Discovery will be looking to maximise subscribers through its Discovery+ platform and Olympic coverage.
‘However, the big loser here is DAZN, which has been trying to establish a UK presence ahead of a possible IPO. Without BT’s subscriber numbers, the “Netflix of Sport” now faces an uncertain future given the platform has been largely funded by billionaire Sir Leonard Blavatnik up to this point.
‘Without a presence in one of the world’s largest sports rights markets, the viability of the entire platform may now be in question.’