Following its announcement of exclusive discussions on 3 February 2022, BT Group plc (“BT Group”) has agreed a set of definitive agreements with Warner Bros. Discovery, Inc. (“Warner Bros. Discovery”) to form a 50:50 joint venture company to create a new premium sport offering for the UK & Ireland (the “JV”), and to transfer the operating businesses of BT Sport to Warner Bros. Discovery (together the “Transaction”).
By bringing together the sports content offering of both BT Sport and Eurosport UK, the JV will have one of the most extensive portfolios of premium sports rights including UEFA Champions League, UEFA Europa League, the Premier League, Premiership Rugby, UFC, the Olympic Games, tennis Grand Slams featuring the Australian Open and Roland-Garros, cycling Grand Tours including the Tour de France and Giro d’Italia and the winter sports World Cup season.
Those customers who access BT Sport through BT directly, and the majority of BT TV customers, are set to receive discovery+, the non-fiction entertainment streaming service which is home to Eurosport’s live and on-demand streaming offer in the UK & Ireland, as part of existing subscriptions.
Both BT Sport and Eurosport UK will initially retain their separate brands and product propositions in the market before being brought together under a single brand in the future. BT Group (through its wholly owned subsidiary British Telecommunications plc (“BT plc”)) and Warner Bros. Discovery will enter into distribution agreements with the JV under which they will distribute the combined sports content to new and existing customers on their respective platforms and apps.
- BT Sport and Eurosport UK to be brought together to form a premium sports joint venture for customers in the UK & Ireland which will be owned 50:50 by BT plc and Warner Bros. Discovery.
- Warner Bros. Discovery and BT plc will each directly contribute, sub-license or deliver the benefit of their respective sports rights and distribution agreements for the UK & Ireland to the JV.
- The Transaction will deliver operational efficiencies through the transfer of the operating businesses of BT Sport to Warner Bros. Discovery.
- BT plc will receive £93m from Warner Bros. Discovery and up to approximately £540m by way of an earn-out from the JV, subject to certain conditions being met.
- BT plc will retain a 50% interest in the JV, and Warner Bros. Discovery will be granted a Call Option over BT plc’s interest in the JV, exercisable at specified points in the first four years of the JV.
- The Transaction is subject to customary closing conditions, including approvals by the relevant regulatory bodies and is expected to complete by the end of 2022.
Marc Allera, CEO BT’s Consumer division, said “As a global sports and entertainment broadcaster Warner Bros. Discovery is the perfect partner to work with us to take BT Sport to the next stage of its growth. We’re excited to be joining forces to bring the best of BT Sport together with Eurosport UK to create a fantastic new sports offer alongside all the entertainment that discovery+ has to offer BT customers.”
“I’m incredibly proud of the established, creative and innovative broadcaster that BT Sport has become. We have a brilliant team who are dedicated to broadcasting amazing sporting moments and we look forward to working with Eurosport UK to realise the opportunities that this next stage will bring both our team and our viewers.”
Andrew Georgiou, President and Managing Director, Warner Bros. Discovery Sports Europe said “We are excited to bring fans a new premium sport offering that brings together everything they love from BT Sport and Eurosport UK. Combining this with our growing portfolio of premium entertainment content promises to deliver consumers a richer and deeper content proposition, not only providing greater value from their subscriptions but bringing sport to a wider entertainment audience.”
The Transaction constitutes a class 2 transaction for the purposes of the UK Financial Conduct Authority Listing Rules and, as such, BT Group plc shareholder approval is not required.
Lazard is acting as exclusive financial adviser to BT Group and CMS Cameron McKenna is acting as legal adviser to BT Group. DLA Piper is acting as legal adviser to Warner Bros. Discovery. PR Newswire