Discovery and British telecom giant BT Group said on Thursday that they were in exclusive talks to merge their sports media units BT Sport and Eurosport in the U.K. and Ireland.
BT Group “has entered exclusive discussions with Discovery Inc. on a deal to create a new sport and entertainment offering for customers in the U.K.,” the company said in the early London morning. “The new business would be a 50/50 joint venture, bringing together BT Sport with Eurosport U.K.”
Discovery added that the talks also include Ireland, saying a joint venture “would bring together BT Sport and Eurosport U.K., which have extensive portfolios of premium sport rights, including the Olympic Games, (the English soccer) Premier League, UEFA Champions League, UEFA Europa League, cycling Grand Tours, tennis Grand Slams, the winter sport World Cup season and Premiership Rugby.”
The goal is to conclude the exclusive discussions early in the second quarter of 2022 and “for the new company to be operational later this year, subject to completion of the deal and approval by the relevant competition authorities.,” BT said.
“We are excited about this opportunity with BT Group to offer consumers a stronger and simplified combined sport offering in the U.K. and Ireland, and, more broadly, to advance our strategy of bringing sports and entertainment to more consumers on the platform of their choice,” said JB Perrette, president and CEO of Discovery Streaming & International. “We are aligned with BT Group on a shared vision to maximize the value and appeal of our respective U.K. sport assets, and we look forward to concluding a deal in the coming weeks.”
BT, which has rights deals for the likes of English Premier League soccer, Premiership Rugby and cricket, said last spring that it wanted to focus on its core telecommunications business and was in negotiations with potential partners over the future of BT Sport. Sports streamer DAZN, whose chairman is former Walt Disney Co. top executive Kevin Mayer and whose parent company is Len Blavatnik’s Access Industries, was widely seen as a potential buyer of BT Sport. Reports previously also said that Disney, Amazon and U.K. TV giant ITV were among other potential suitors.
“The new combined business would remain committed to retaining BT Sport’s existing major sports broadcast rights, while BT Sport customers would get access to Discovery’s sport and entertainment content, including the Discovery+ app,” BT said.
“The proposed joint venture with Discovery Inc. would create an exciting new sports broadcasting entity for the U.K. and would act as a perfect home for our BT Sport business,” said Marc Allera, CEO of BT Consumer. “With a shared ambition for growth, as well as the combination of our world-class sports assets along with Discovery’s premium sports and entertainment content, our customers will benefit from even more content in more places.”
Mayer, late last year, told the Royal Television Society Cambridge Convention that DAZN would “possibly” be interested in acquiring BT Sport to get its hands on soccer games from the English Premier League (EPL). “We would love to have EPL,” he said, but highlighted that “ultimately, there are many paths to get there.” He also called BT Sport “a great business and a good sports service.”
On Thursday, Mayer said: “Over the past year, we at DAZN have driven excellent momentum across our business, including recent wins of premium local football rights with LaLiga in Spain, Serie A in Italy and Bundesliga in Germany. We remain fully committed to growing our business and investing in the U.K., as you will see in the near future. On this occasion, however, the deal for BT Sport became uneconomical for DAZN. However, we respect that BT chose a different strategic path, and wish BT, BT Sport and Discovery all the best for the future.”
Reports in the past also said that one complication of the BT Sport deal was a cross-licensing agreement between BT and Comcast’s pay TV giant Sky, which meant the latter had to approve any sale.
Discovery entered the sports media business in 2014 with its acquisition of European sports network Eurosport. “Today, Discovery’s sports business – under the Discovery Sports banner – produces and distributes content to 130 million unique individuals a month across more than 200 markets and 20 languages outside the U.S.,” the company said on Thursday. “Discovery Sports’ consumer brands include Eurosport, Global Cycling Network (GCN), Global Mountain Bike Network (GMBN), Golf Digest and GolfTV powered by PGA Tour, as well as sports programming and content on Discovery+ and Discovery’s free-to-air TV networks in Europe. The leading sports news and video site, Eurosport.com, and its local country versions, engages audiences of more than 50 million sports fans per month.”