Cable Forum - View Single Post - General ESPN, BT, Euro, Premier and Sky Sports news

MaverickJesus · 03-08-2013, 23:03

Did some rough back of a napkin calculations on how this adds up for BT:

The premiership TV deal was ~£730m over 3 years, so adding in the other rights (which are much lower in value), plus running costs, I think for BT to break even purely on the TV they need to be clearing ~£1bn (?) in revenue from BT Sports over the 3 year period, which is ~£28m a month.

Current subscriber numbers are ~500,000, although I would expect that to double by the end of the year once things get rolling. Pricing this is harder, as the BT broadband customers get this for free, but this is offset partially by extra profit they get from increased broadband customers. There is also a dual pricing model (£12 or £15), so to balance out both sides lets just naively class everyone as on the £12 tier. So, at expected end of year rates, they will have less than half of the required customers to hit even - rough estimate, they would need 2.5m users for a like for like offset, knock off 500k+ for the extra profit they would gain from pulling people over to BT Vision, BT Talk and BT Broadband and triple play bundles.

So, to sum up a very simplistic model, BT need to double the year end 2013 customer numbers over three years for it to be a worthwhile venture.

BT: Need 2m
ESPN: Had ~1.2m (estimate)
Sky Sports: Have ~5m (estimate)

So, given the quality of BTs current rights (based on general subscriber popularity), which puts them somewhere above ESPN but well below Sky Sports, if they have hit ~1m by the end of the year I think they will actually be fine without needing to wholesale to BT to anyone.

---------- Post added at 23:03 ---------- Previous post was at 22:48 ----------

(Basically its almost impossible to tell, but they should manage a break even long term, with significant gains in the other core products as a knock on effect - so it probably does make business sense. Really needs 2+ years data to make any real conclusions)

03-08-2013, 23:03	#2974
MaverickJesus cf.addict Join Date: Dec 2011 Posts: 270	Re: ESPN, BT, Euro, Premier and Sky Sports news Did some rough back of a napkin calculations on how this adds up for BT: The premiership TV deal was ~£730m over 3 years, so adding in the other rights (which are much lower in value), plus running costs, I think for BT to break even purely on the TV they need to be clearing ~£1bn (?) in revenue from BT Sports over the 3 year period, which is ~£28m a month. Current subscriber numbers are ~500,000, although I would expect that to double by the end of the year once things get rolling. Pricing this is harder, as the BT broadband customers get this for free, but this is offset partially by extra profit they get from increased broadband customers. There is also a dual pricing model (£12 or £15), so to balance out both sides lets just naively class everyone as on the £12 tier. So, at expected end of year rates, they will have less than half of the required customers to hit even - rough estimate, they would need 2.5m users for a like for like offset, knock off 500k+ for the extra profit they would gain from pulling people over to BT Vision, BT Talk and BT Broadband and triple play bundles. So, to sum up a very simplistic model, BT need to double the year end 2013 customer numbers over three years for it to be a worthwhile venture. BT: Need 2m ESPN: Had ~1.2m (estimate) Sky Sports: Have ~5m (estimate) So, given the quality of BTs current rights (based on general subscriber popularity), which puts them somewhere above ESPN but well below Sky Sports, if they have hit ~1m by the end of the year I think they will actually be fine without needing to wholesale to BT to anyone. ---------- Post added at 23:03 ---------- Previous post was at 22:48 ---------- (Basically its almost impossible to tell, but they should manage a break even long term, with significant gains in the other core products as a knock on effect - so it probably does make business sense. Really needs 2+ years data to make any real conclusions)