Sky Will Let Some Sports Rights Go in Shift to Entertainment

  • Pay-TV provider still plans to spend on important deals: CEO
  • Company examining content-delivery options as viewing changes

Sky Plc, the dominant European pay-TV provider that built its franchise on sports, is becoming more selective about what broadcast rights it seeks as the company focuses more on entertainment.

The U.K.-based broadcaster, whose largest shareholder is Rupert Murdoch’s 21st Century Fox Inc., will prioritize the most important rights and let others go as it reduces dependence on sports, Chief Executive Officer Jeremy Darroch said Thursday at a Morgan Stanley investor conference in Barcelona.

“Sport is very important, obviously football is very important, but relatively, every day it is less important than it was and that allows us to make more choices about how much we spend, where we invest and where we choose not to,” Darroch said.

Sky is grappling with viewership declines for English Premier League games as viewers shift online, while rivals such as BT Group Plc drive up costs by bidding for the rights. To lessen its reliance on sport, Sky has been boosting investment in entertainment, including by producing original TV shows and securing content from Time Warner Inc.’s HBO.

Much of the drop in Premier League viewership this season can be blamed on competition early on from the Rio de Janeiro Summer Olympics and the 2016 European soccer championship, Darroch said.

However, the company is monitoring a trend playing out across major sports globally: younger viewers in particular are now less committed to watching entire games and are instead keeping tabs on smartphones, he said. It’s a reminder to examine how much content to leak onto different platforms, he said.

“It’s a slightly more complex picture,” Darroch said. “We’re seeing similar things going on with the NFL. A lot of the sports governing bodies will keep an eye on this as well.”

BT Chief Executive Officer Gavin Patterson also played down the amount the British former telephone monopoly will cough up for upcoming rights. Last year, Sky and BT agreed to pay a record 5.14 billion pounds ($6.4 billion) for the U.K. rights to broadcast live Premier League soccer, an increase of 70 percent.

While European Champions League soccer has been a “great driver” for BT, attracting paying customers, the company won’t spend more than the rights are worth at the next auction, Patterson said at the conference.

“If the price becomes too rich, we’ll have to walk away,” Patterson said.

Sky fell 2.6 percent to 764.50 pence at 12:36 p.m. in London. BT dropped 1.9 percent to 366.50 pence.

Darroch said Sky will take part in the Champions League bidding, though much depends on how the teams package the rights.

“We’ll look at it,” Darroch said. “We’ll have to see the weight and size of it.”

— With assistance by Michael Scaturro

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