British Telecom Giant BT Denies Charging Customers Extra After Signing £1.2BN Deal For Champions League Rights

British Telecommunications (BT) has denied charging customers the entirety of a bill to cover for a £1.2 billion ($1.47 billion) Champions League soccer rights deal after securing the contract in the wake of giant price hikes for its broadband and phone services.

British Telecom Giant BT Denies Charging Customers Extra

The telecom giant has paid the hefty sum to beat out Sky Sports and renew exclusive broadcast rights for Champions League and Europa League football. The contract, which runs from 2018 to 2021, represents a 32 percent increase with respect to its current three-year deal.

This rights victory comes after the company sparked anger from its customer base due to its third price increase in 18 months at the start of the year. In January, BT announced it was going to raise the price of broadband and calls. It also announced that BT Sport will no longer be given away free to its BT TV customers and that it would begin charging them £3.50 ($4.28) a month for the service from August. Both of these price increases will affect around 10 million customers beginning April 2, equaling increases of about 5 percent to 6 percent.

John Petter, the chief executive of BT’s consumer division, denied customers were being charged in order to finance the firm’s competition against Sky for premium sports rights.

“I don’t think that is true,” said Petter. “The broadband market is very competitive. Our share of the broadband market has been growing and customers vote with their feet [if they are unhappy]. The fact that the market is competitive means our offering has to represent good value for money. Line rental has not increased, for example. I don’t think people should read that this [deal] translates to price increases.”

The new contract signifies BT’s costs for Champions League and Europa League per season will increase from £299 million ($366 million) to £394 million ($482 million), as rampant inflation in premium sports rights persistently continues.

Before BT Sport joined the market two years ago, Sky and ITV had shared Champions League rights in a deal worth £400 million ($490 million) over three years.

Petter said BT was aiming to take that deal from Sky, although “not at any price.”

“We were keen to keep a balance and be financially disciplined,” he said. “We have to give customers value for money, as well as shareholders, and we have to keep in balance. This deal creates a lot of extra value for customers.”

Ratings for Champions League games have dropped in recent years, a fact noted by Sky when it lost the rights to BT at the 2013 auction.

“That may be true of other channels but it is not true of us,” said Petter. “We are up 5%.”

BT has promised wider viewing access to the Champions League, with clips and highlights to be made available free on social media, as well as making screenings of both finals free-to-view. Last season, BT streamed both finals on YouTube.

The deal means ITV will no longer be able to broadcast Champions League highlights after matches have finished on BT.

Petter emphasized that BT is now “truly exclusive,” and added that social media viewership has increased substantially in recent months and years.

BT is also considering sub-licensing contracts with free-to-air partners like Channel 4 and ITV, after competition sponsors expressed concerns to UEFA— the Champions League’s governing body— over the lack of exposure under the current deal.

Nevertheless, Petter stressed that UEFA was in no way pressuring BT to secure a free-to-air TV deal.

MADRID, SPAIN – FEBRUARY 15: Karim Benzema of Real Madrid controls the ball from Lorenzo Insigne of Napoli during the UEFA Champions League Round of 16 first leg match between Real Madrid CF and SSC Napoli at Estadio Santiago Bernabeu on February 15, 2017 in Madrid, Spain. (Photo by Gonzalo Arroyo Moreno/Getty Images)

Article by Pablo Mena