BT won a round in its long-running legal wrangle with BSkyB yesterday when the Competition Appeals Tribunal (CAT) ruled that the telco should be allowed to retail the Sky Sports 1 and 2 channels through its YouView set-top boxes. The CAT yesterday allowed the terms of an interim order to be amended to cover the IPTV set-top boxes.
BT said it would add the two flagship Sky Sports channels to its service soon. BSkyB, however, noted the measure was temporary and said it would continue to pursue its attempt to overturn the obligation to offer its two flagship channels to BT, Virgin Media and Talk Talk at a price set by Ofcom. The communications regulator issued the order in March 2010, which BSkyB then challenged at the CAT.
Sky Sports 1 and 2 broadcast all of BSkyB's 116 Premier League matches a season. The order applies only to the standard definition versions of the channels and does not include Sky Sports 3, 4 and F1. BSkyB's position with regard to BT is that it would be prepared to discuss terms to wholesale its sports channels to the telco's IPTV platform if BT makes a reciprocal agreement to offer its BT Sport pay TV package via BSkyB. At present BT Sports is available to Sky satellite customers only though a direct subscription with the telco.
While a small moral victory for BT, the ruling will have a limited impact on the telco's TV business, largely because its own investment in sports rights has transformed the UK pay TV market since Ofcom's ruling - itself the coda to a lengthy investigation - more than four and a half years ago. After paying £738 million to acquire two packages of rights to the Premier League for three seasons starting in 2013/14, BT signalled its intention to challenge BSkyB directly rather than waiting for a deal to distribute its sports channels.
Since then, BT has invested even more in sports rights, with deals for English club rugby union and the Champions League and Europa League (from 2015/16), and a 10-year lease on a broadcast centre at the Olympic Park in east London signifying its commitment. BT stopped delivering the Sky Sports channels to its subscribers in July 2013, deciding to use the digital terrestrial capacity for its own channels, and also began to phase out its original BT Vision set-top box with YouView boxes. The drawback was that this meant BT customers with a YouView box have been unable to access Sky Sports without also taking a satellite or cable subscription. Subscribers to rival IPTV service TalkTalk, however, are able to add the whole Sky Sports offer of six SD channels to their package for £30 a month.
Clearly, some BT subscribers - who numbered 1.045 million at the end of Q3 - will add the Sky channels to their package, while TalkTalk subscribers would also have an added incentive to churn. BT did see a clear uplift in subscribers to its TV package after its added Sky Sports in late 2010, adding 40,000 net subs in Q4, more than double to amount added in the same period of 2009. However, BT did not have its own sports offering then and with a claimed five million BT Sport customers it is clear that maintaining its own pay TV business is now vastly more important than hammering out a deal with BSkyB.