A Soccer Battle Taking Place Off the Field

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SERRAVAL, FRANCE -- When soccer players get into a scrap, television commentators usually tut-tut their disapproval. In the English Premier League, however, the exchange of insults is taking place in the broadcast booths. And British soccer fans could be the losers.

On one side is British Sky Broadcasting, a pay-television company whose largest shareholder is News Corp. Sky has long owned the rights to the most attractive Premier League matches, using them to help draw more than 10 million subscribers to its pay-television service, delivered via satellite. On the other side is BT, the former British Telecom, which wants a piece of the action.

Sky has previously faced competition from other television providers that have acquired the domestic rights to some of the Premier League matches -- most recently from ESPN, whose three-year contract expires with the 2012-13 season. But none has posed a serious threat to Sky.

BT surprised analysts last year when it moved aggressively to challenge Sky, acquiring the rights to 38 matches a season over the next three years, beginning with the 2012-13 season. While Sky owns the rights to far more games, 116 matches, it is taking the challenge from BT seriously.

"BT is quite a formidable competitor," said Tim Westcott, a senior analyst at Screen Digest in London. "It has the ability, if it wants to, to stay in the market for quite some years," because of its size in the British market.

Even before the season gets under way in August, BT and Sky have been battling for position off the field, exchanging a few barbs in the process.

This month, BT complained to regulators after Sky blocked BT from advertising its new sports channels on Sky Sports. Sky says it should not be forced to carry ads for a rival service; Ofcom, which oversees the British media, is to rule on the matter shortly.

John Petter, the head of BT's retail division, told The Guardian newspaper that Sky's move was like a Rottweiler "running away from a newborn puppy."

That prompted Graham McWilliam, director of corporate affairs for Sky, to fire back that it was unfair of BT to call itself an underdog, given its £22 billion, or $35 billion, market capitalization. BT, he said, has long banned Sky from advertising on BT's Web portal -- though BT says no outsiders are permitted to do so, meaning it was not singling Sky out.

"This £22 billion gorilla in puppy's clothing would do well to look at its own double standards," Mr. McWilliam wrote in a letter posted on Sky's Web site.

The two companies are also battling each other over access to pubs -- a lucrative business, because some bars pay thousands of pounds a year for the right to show Premier League matches, which often pack the house with thirsty customers.

The appeal of English Premier League soccer was demonstrated last week when NBCUniversal, which owns several television channels in the United States, said it had signed a three-year U.S. broadcast deal, worth an estimated $250 million.

The Premier League's domestic rights agreements are far bigger; together, BT and Sky are paying £3 billion over three years to show the games.

Analysts say it would be impossible for either company to recoup this investment via their sports channels alone. In both cases, soccer is being used as a loss leader to support the companies' bundled offerings -- called triple play because they include telephone calls, broadband Internet and television.

Beginning in 2006, BT and Sky began moving onto each other's turf, with Sky starting a broadband service and BT introducing television, delivered via phone lines. Sky has been more successful, attracting 4.5 million broadband subscribers, while BT has attracted only 770,000 television customers.

BT does have 6.5 million broadband customers, but since 2006 it has lost more than three million home phone lines. So BT sees the investment in soccer as essential to stemming further losses.

"Only one in five homes currently take Sky Sports, so there is plenty of space in the market for a new entrant," said Marc Watson, chief executive of BT's television business. "People would be mistaken, however, if they think this is just about TV or sport. Broadband is the real battleground here."

British soccer fans are watching the latest fight closely because it could make it more cumbersome for them to follow their favorite teams.

While NBCUniversal will carry all 380 Premier League matches live on various channels in the United States, BT and Sky together will show fewer than half as many games in Britain, because of an arrangement intended to maintain ticket sales at soccer stadiums.

For the past few seasons, British fans were at least able to catch all the live games offered by Sky and ESPN with a single subscription, because ESPN made its broadcasts available to Sky to resell to its customers.

Sky and BT are talking to each other about a similar agreement, under which each company would offer the other's matches to their customers for a single monthly payment. But regulators ruled last year that Sky did not have an obligation to offer its matches to rivals for reselling.

"Sky remains very open to providing its Premier League matches to BT," said Stephen Gaynor, a spokesman for Sky. "Our main concern is that any agreement creates a level playing field whereby both companies are able to offer their customers all live Premier League matches by the start of the new season."

If BT and Sky are unable to reach a deal, viewers who want to see all the available games might have to take out two separate subscriptions.

"Most fans are probably willing to pay a few extra pounds per month to watch these matches," said James Marsh, media research manager at Sportcal, a sports news and information service in London. "But watching sports is becoming more and more complex every year."

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This article originally appeared in The New York Times.


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