Discovery is reported to be in talks about BT’s sale of its sports unit, despite earlier confirmation in September that sports streaming service DAZN was in “advanced” discussions.
Discovery, which owns Eurosport and certain rights to the Olympic Games, is understood to be discussing a joint venture with BT that would combine their sports broadcasting assets, with BT eventually selling out of the joint venture. Discovery is also in the throws of combining with the spun-off media assets of AT&T.
BT established its sports business in 2013, having acquired a selection of English Premier League rights, to which it has added European club football competitions, as well as MotoGP, WWE, Gallagher Premiership Rugby and other sports. It has achieved two million subs, but at a high price in terms of sports rights, marketing and discounting. New management no longer sees it as central to holding on to broadband customers and has diverted attention to investing heavily in fibre. Hence the ‘for sale’ notice and subsequent talks with DAZN, but these are said to have bogged down over terms.
Interestingly Keven Meyer, chair of DAZN, is also an adviser to Discovery but the FT reports the parties have agreed there is no conflict of interest.
It is possible the sale, if delayed, could be become academic as Altice’s Patrick Drahi may re-enter the frame with a bid for the whole of BT. In June he surprised the City buying a 12% stake but announced he backed the management and would not make a bid. Under City rules he has stick by that for six months – a period that expires this week. However, the leveraged buy-out specialist is currently weakened by poor performance in the US and European markets like Portugal, where the Altice mobile operator is for sale.
BT has been seen as a takeover target for years: it is small by world standards, has performed poorly and is periodically exposed internationally by a weak currency. Its best defence has been a legacy pension scheme with billions in liabilities any new owner would have to shoulder.