Shares in Sky fell more than 5 percent after the pay-TV group agreed to pay a record 4.2 billion pounds ($6.4 billion) to retain its dominance of Premier League soccer broadcasting rights in Britain. Ciara Lee asks if they paid too much?
It's a record TV deal and Sky emerged the champions, paying 4.2 billion pounds for the rights to show the lions share of Premier League matches. They'll broadcast 126 live games over three years after one of the most high-profile broadcast auctions ever. The pay-TV group won five of the seven rights packages with sealed bids. Fierce rival BT - which is trying to win customers to its broadband service - will pay 960 million pounds to show 42 games a season. The two companies will be shelling out a combined 5.14 billions pounds - that works out at around 10.2 million pounds per match - or well over 100,000 pounds per minute. So have Sky paid too much? Darren Sinden is from Admiral Markets UK. SOUNDBITE (English) DARREN SINDEN, MARKET RESEARCH ANd CLIENT RELATIONS MANAGER AT ADMIRAL MARKETS UK, SAYING: "They paid 330 million pounds more than the concensus forecasts that analysts were talking about and I believe I am right in saying they are paying 70 percent more per game than they were when the rights were renegotiated. So I think the relative share price of BT and Sky tell you what the market thinks. Sky down sharply from the open this morning, BT a reasonable riser. The feeling being that BT got the best of the deal." Sky will cut costs within the business and raise some prices for customers to pay for the new deal. Premier League Chief Executive Richard Scudamore. (SOUNDBITE) PREMIER LEAGUE CHIEF EXECUTIVE RICHARD SCUDAMORE, SAYING: "This is not about where do you buy your sports packages. This is about where do you buy your television, your telephony, your broadband. The market we are now in is a very very bundled market and the offers and the way that people are competing for everybody's digital home, is very competitive." The most contentious issue for some though is why prices at the turnstiles remain so high. UK Premiere League matches are the most expensive in Europe and some argue it's the fans that make the sport good for tv. Many are now calling for a cap on ticket prices. But that may not be possible when it comes to players' wages. They could be the winners here - and there's still more to play for - the deal for international rights is still to come.