Sky Beats BT in Share Price Battle

BT may have acquired the rights to broadcast the UEFA League beginning in 2015, but analysts say Sky is the better value investment

Allan C. Nichols, CFA 12 November, 2013 | 9:16AM

 BT Group (BT.A) announced over the weekend that it won all live U.K. television rights to the UEFA Champions League and UEFA Europa League games for the 2015-16 through 2018-19 seasons.

BT is paying roughly £900 million for the seasons. While we were quite surprised to see  British Sky Broadcasting (BSY) lose the rights, we are pleased to see the firm acting rationally from a finance perspective. We don't see how BT can earn enough to justify the price it paid when even BSkyB, which has much greater scale, passed on the deal.

We wonder if BT's objective was to try to force BSkyB to pay up for the rights to hurt it financially, and the firm called BT's bluff. Another possibility is that this provides BT with greater leverage in negotiations regarding wholesale deals with BSkyB. Regardless, we continue to think BT's shares are overvalued.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
BT Group PLC103.45 GBX0.10

About Author

Allan C. Nichols, CFA  is a senior stock analyst and international investing specialist with Morningstar.

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