BT, Warner Bros. Discovery to form premium sports joint venture | Media Investment | Business | News | Rapid TV News
By continuing to use this site you consent to the use of cookies on your device as described in our privacy policy unless you have disabled them. You can change your cookie settings at any time but parts of our site will not function correctly without them. [Close]
Just over a year after it first entered discussions with interested parties for a sale of its sports broadcast division, and three months after the two companies began talks, BT Group has now agreed to form a joint venture company with Warner Bros. Discovery to create a new premium sport offering for the UK and Ireland.
BT Warner 12May2022
At the heart of the new 50:50 joint venture is that after completion, the production and operational assets of BT Sport will transfer to and become a wholly owned subsidiary of Warner Bros. Discovery which owns Eurosport. By bringing together the sports content offering of both sports channels, the JV will have one of the most extensive portfolios of premium sports rights including UEFA Champions League, UEFA Europa League, the Premier League, Premiership Rugby, UFC, the Olympic Games, tennis Grand Slams featuring the Australian Open and Roland-Garros, cycling Grand Tours including the Tour de France and Giro d'Italia and the winter sports World Cup season.

Both BT Sport and Eurosport UK will initially retain their separate brands and product propositions in the market before being brought together under a single brand in the future. BT Group and Warner Bros. Discovery will enter into distribution agreements with the JV under which they will distribute the combined sports content to new and existing customers on their respective platforms and apps. In addition, Warner Bros. Discovery and BT will each directly contribute, sub-license or deliver the benefit of their respective sports rights and distribution agreements for the UK & Ireland to the JV.

Those customers who access BT Sport through BT directly, and the majority of BT TV customers, are set to receive discovery+, the Warner Bros. Discovery non-fiction entertainment streaming service which is home to Eurosport’s live and on-demand streaming offer in the UK and Ireland, as part of existing subscriptions.

As part of the deal, BT plc will receive £93 million from Warner Bros. Discovery and up to approximately £540m by way of an earn-out from the JV, subject to certain conditions being met.BT plc will retain a 50% interest in the JV, and Warner Bros. Discovery will be granted a Call Option over BT plc’s interest in the JV, exercisable at specified points in the first four years of the JV. The transaction is subject to customary closing conditions, including approvals by the relevant regulatory bodies and is expected to complete by the end of 2022.

BT’s agreement with the JV will extend beyond 2030, and for the first four years, includes a minimum revenue guarantee of approximately £500 million per annum, after which the agreement will change to a fully variable arrangement.

Commenting on the joint venture, Andrew Georgiou, president and managing director, Warner Bros. Discovery Sports Europe said: “We are excited to bring fans a new premium sport offering that brings together everything they love from BT Sport and Eurosport UK. Combining this with our growing portfolio of premium entertainment content promises to deliver consumers a richer and deeper content proposition, not only providing greater value from their subscriptions but bringing sport to a wider entertainment audience."

Added BT Consumer division CEO Marc Allera said: “As a global sports and entertainment broadcaster Warner Bros. Discovery is the perfect partner to work with us to take BT Sport to the next stage of its growth. We’re excited to be joining forces to bring the best of BT Sport together with Eurosport UK to create a fantastic new sports offer alongside all the entertainment that discovery+ has to offer BT customers.

“I’m incredibly proud of the established, creative and innovative broadcaster that BT Sport has become. We have a brilliant team who are dedicated to broadcasting amazing sporting moments and we look forward to working with Eurosport UK to realise the opportunities that this next stage will bring both our team and our viewers.”

The move comes as BT announced its full year 2021/22 results showing revenues slipping with modest rises in overall profits. The results also showed BT’s commitment on focusing on core infrastructure, in particular the Openreach fibre business and 5G mobile, and divesting other non-core lines such as broadcasting. Based on unaudited management information, as at 31 March 2022, the value of the gross assets of BT Sport business to be contributed to the JV and the operating businesses of BT Sport was calculated to be £339 million and it had an operating loss for the year of £222 million.