In a deal that’s been teased since February, we’ve finally seen a formal announcement that UK-based telecom giant, BT Group, and Warner Bros Discover will be merging sports media units BT Sport and Eurosport in the UK and Ireland as a 50/0 joint venture. Blake & Wang P.A entertainment lawyer, Brandon Blake, unpacks what we know.
HBO Content Falls Away
As we already expected, the existing content output funnel to the UK’s Pay-TV giant, Sky, will not continue, at least in its current form. While the merger is still a way off, we will instead see the combination of HBO Max with Discovery+ replace this in the British market.
The new venture, however, seeks to fit into the new entity’s push to enter different markets. WBD has been positioning itself as a ‘multi-product’, rather than a one-trick pony, in the streaming market for a while now.
The combination of two larger sports streaming entities in the UK will give it a powerful corner of the market to play with, too.
Existing Subscriber Swop-Over
Those who already access BT Sport as part of their wider BT packages will receive Discovery+ in its stead, with both live and on-demand sports streaming on offer. Both entities will funnel their existing sports rights and distribution agreements to the new entity, while WBD will assume direct command of BT Sport’s operating businesses. BT will net $114 million (£93 million) from WBD, as well as an approximate earn-out of around $659 million (£540 million), although there are attached conditions. Likewise, BT retains a 50% interest in the joint venture. WBD receives a call option over that interest, however, to be exercised at specific points in the first four years.
It’s a pretty major shift in the UK’s live sports landscape, with the top leagues of English soccer, cricket, and rugby entering the scene. BT wishes to roll back focus to its telecommunications business, and BT Sport has underperformed for them to date. Meanwhile, WBD scores an interesting foothold on live sport in the key European destination. It will certainly be interesting to see how the scene develops from here.
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