Premier League nets 70 percent jump in TV deal
LONDON (Reuters) - Pay television broadcaster BSkyB and former state telecoms company BT will share live domestic rights to English Premier League football from next year in a deal that has jumped in value 70 percent.
They agreed to a three-year contract worth 3.018 billion pounds that cements the Premier League's position as the most valuable domestic football competition in the world.
BSkyB, partly owned by Rupert Murdoch's News Corp, has broadcast the Premier League for two decades and has used the relationship to build a TV business that has more than 10 million customers, close to half of British households.
BSkyB will spend 760 million pounds a year for rights to 116 games.
The real surprise was BT's decision to invest an annual 246 million pounds for 38 matches -- ousting U.S.-owned ESPN as the second broadcaster of Premier League action.
BT said it planned to launch a new football channel to carry the games and would offer them over its fibre network and on other platforms.
"BT is already investing 2.5 billion pounds in fibre broadband. Securing Premier League rights fits naturally with this as consumers increasingly want to buy their broadband and entertainment services from a single provider," said BT Chief Executive Ian Livingston.
Analysts said BT could pose a strong challenge to BSkyB's position as the dominant sports-content supplier.
"We see BT as a more dangerous competitor than ESPN and there may be a risk BT seeks to acquire more sports content," said UBS analyst Polo Tang.
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Premier League Chief Executive Richard Scudamore said he was delighted to have secured such a good deal when Britain was struggling in recession.
"I was as surprised as anybody - there was a bit of a gasp in the room when we read out the number," said Scudamore, after an auction involving sealed bids.
The 70 percent increase outstrips the 52 percent rise obtained by the German Football League under a deal struck in April with Sky Deutschland, which also partly owned by Murdoch's News Corp.
The windfall is timely as football clubs need to move toward break-even or ultimately risk exclusion from European competitions such as the Champions' League.
Scudamore said he hoped clubs would not just spend the money on wages for players - who already get 70 percent of the league's revenue - but also invest in stadiums and training of young players and clean up their finances.
"Priority No. 1 is to attract and retain top talent ... but some of it ought to be used in my view to reduce some of the losses," he said.
The Premier League generates an additional 1.3 billion pounds from overseas TV deals and will be negotiating new three-year deals around the globe in the coming months.
"By December we will know where are internationally. Some of our international markets could be soft," said Scudamore.
(Editing by Neil Maidment, Elaine Hardcastle and Steve Orlofsky)
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