While shares in the former have fallen 2.5% in midweek business, its rival has gained a meaty 3%, reflecting a belief that BT may have taken a more shrewd approach in the bidding approach compared with Skys elephant gun.
Indeed, Skys investors are concerned that the company may have shelled out far too much to maintain its place as the go-to destination for fans of the worlds most popular domestic league. The Brentford-headquartered firm paid a colossal 1.4bn per season for three years from 2016/2017, beating City estimates of around 1.1bn and representing an eye-watering 83% rise from the previous auction.
Sky dodges a bullet
Still, the necessity for Sky to reinforce its near-monopoly on English top-flight football cannot be underestimated. The firm is still shaking from losing the holy grail of UEFA Champions League to its rival BT just over a year ago in a deal running 2015 to 2018, so the loss of the Premier League would have ripped the backbone out of its sports coverage.
Taking away the huge cost of the auction a big ask, undoubtedly the latest deal has arguably strengthened Skys strangehold on the league. Although the business still holds the rights to broadcast 75% of live games versus BTs 25%, the company has 68% of first-pick matches versus 53% previously, and 82% of second-pick matches, giving it access to the most attractive matches each week.
And as UBS points out, Skys victory in securing five of the seven packages allows it to show matches from Friday through Monday, mitigating the loss of Champions League football on Tuesday and Wednesday evenings.
As well, the right to show more live games 126 under the new rules versus 116 at present will also give it scope to raise the price of Sky Sports subscriptions, while the 80m saving each year from the loss of the Champions League will also mitigate the vast expense of yesterdays auction.
BT enjoys boost without bulging costs
So what does the deal mean for BT? Well, while it could be argued that the firm has missed a trick in not decapitating Skys sports portfolio, the business will be delighted that it only had to pay an 18% premium to its previous deal, with costs rising to 320m per season.
And the deal also allows BT to screen an increased number of games, up to 42 from 38 under the current terms. With the company already holding live broadcasting rights to Italys Serie A, Germanys Bundesliga and Frances Ligue 1 and of course the Champions League from this year BTs has undoubtedly boosted its appeal for those seeking the cream of European soccer.
With BT also forking out a fortune to boost its quad-play proposition including the 12.5bn acquisition of mobile giant EE and its rolling, capex-sapping fibre-laying programme it could be argued that the firms decision not to throw the kitchen sink at this weeks auction was a prudent decision. Indeed, BT may be playing the long game by allowing Sky to secure the pick of the rights at huge cost, a vast financial burden which could hinder its expansion in other multi-play areas.
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