Broadcasting rivals Sky and BT have struck a major deal that will allow them to sell their channels on each others’ platforms.
The reciprocal cross-licensing deal comes in the wake of Disney’s announced £39billion purchase of Fox yesterday including its 39.1 per cent stake in Sky,
It ends a long-running dispute over a wholesale deal pre-dating the launch of BT Sport four years ago.
Previously customers have had to buy channels on top of their existing contracts to access the full range of content from each company.
Rival partnership: Premier League and UEFA Champions League football from BT Sports channels will be made available on the Sky platform under the terms of the new deal
Under the terms of the new agreement, BT will wholesale its BT Sport channels to Sky, enabling it to sell them directly to Sky satellite customers.
This will mean BT’s live UEFA Champions League and Premier League football being made available on the Sky platform.
BT has spent more than £3.5bn on Champions League and Premier League football rights since 2012 in a bid to compete with Sky.
The deal between the two giants will also see BT ‘market and sell’ Sky’s Now TV service to its customers.
Now TV offers Sky’s most popular content, including Sky Sports, Sky Cinema and the Sky Atlantic channel, home to Game of Thrones in the UK.
BT said that the integration of Now TV de-risks its sports strategy and helps it to compete with rivals such as Netflix by aggregating more content.
The new services will be available to customers from early 2019.
BT’s chief executive Gavin Patterson said: ‘This is an important day for BT and for our customers, who will be able to enjoy a whole range of Sky’s sport and entertainment programming on their BT TV boxes.
‘This is the next logical step for our TV and content strategy.
‘We feel that now is the right time to broaden the ways in which we distribute BT Sport.’
Progressive move: BT’s chief executive Gavin Patterson said the deal was the next logical step for its TV and content strategy
Sky boss Jeremy Darroch said: ‘This is great news for Sky customers who will be able to access all matches on Sky and BT channels from the Premier League, UEFA Champions League and Europa League directly with a single Sky TV subscription and with the great customer service that we provide.
‘This is all part of our stated strategy to enhance our customer offering, to broaden our appeal and to open up new revenue streams for our business.’
Michael Hewson, chief market analyst at CMC Markets, said: ‘This certainly seems a better deal for BT than it is for Sky given that Sky will take BT’s sport content while BT gets Sky’s sports, cinema and Sky Atlantic channel, and could even gain more access to content further down the road.
‘It seems that there may be more at play here than simply a policy of retaining market share and slowing down churn rates between BT and Sky.’
Richard Broughton, research director at media analysts Ampere, said: ‘It is a consequence of increasing sports rights.
Attractive deal: Sky boss Jeremy Darroch said that the move was part of its strategy to enhance its customer offering, to broaden appeal and to open up new revenue streams
‘The new rights are up for renewal very soon and this is a pre-emptive shot from both companies to limit their exposure to damage should they not get key rights and also allow them to be a little less aggressive in their bidding.’
The deal comes ahead of a fresh auction of Premier League rights covering three seasons.
The auction, which will put BT and Sky against one another and could see the emergence of new bidders such Amazon and Facebook, kicks off in February.
Earlier this month, Patterson warned that there were limits to what BT is willing to pay for broadcasting rights having previously secured a multi-billion-pound deal for a quarter of Premier League games and all of the Champions League games at the last auction.
The ongoing battle between BT and Sky has pushed prices up by almost 190 per cent since 2012, with the Premier League last selling the rights for £5.2bn in 2015.
Some links in this article may be affiliate links. If you click on them we may earn a small commission. That helps us fund This Is Money, and keep it free to use. We do not write articles to promote products. We do not allow any commercial relationship to affect our editorial independence.