BT Sport and Discovery deal faces competition inquiry

TELECOM giant BT’S £633m sports broadcasting tie-up with Warner Bros Discovery is being investigated by the competition watchdog amid fears it could lead to higher prices for football fans.

Under a deal announced in May, BT agreed to create a 50-50 joint venture with Discovery that will bring together BT Sport and Eurosport.

BT would immediately receive £93m and up to £540m more if certain conditions are met. It would also result in the broadcasting rights for the Olympics, Premier League football, Champions League football, Grand Slam tennis and Premiership rugby being brought under one corporate roof.

But yesterday the Competition and Markets Authority (CMA) announced it had launched a phase one inquiry into the deal. The regulator said it will examine whether the merger “may be expected to result in a substantial lessening of competition”.

Paolo Pescatore, an independent telecoms analyst, said an investigation would likely examine whether consumers could face higher subscription fees or broadcasters could be charged more to carry the BT Sport and Eurosport channels after the deal is completed.

He added: “BT Sport already has a reasonably broad portfolio of sports broadcasting rights, but when you bring that together with the tennis Grand Slams that Eurosport has and the cycling events like the Giro d’italia it does strengthen the overall position.

“They could potentially come to market and say there is now a much broader offering, so consumer prices should now go up as well as prices charged to their retail partners.”he added that it was “always the expectation that this deal would be investigated” and that he did not expect the CMA to block the transaction. In its statement the CMA said it was inviting comments on the deal from “any interested party” by a deadline of June 17.

If the CMA decides there are concerns, it could launch a more in-depth investigation and even seek to block the deal. It has until July 28 to decide.

BT said: “The CMA routinely looks at any proposed joint venture of this sort, so this is a normal part of the process.”