Sports Business: Sky, BT face £1bn loss if sporting events shut till August

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Broadcasters Sky and BT are facing a collective loss of up to £ 1 billion ($ 1.23 billion) is sports events in England worldwide are not resumed till August. Sky will be the worst hit as losses are feared to run up to £ 700 million ($858 million), while BT stands to lose £ 228 mn ($280 mn), British publication The Guardian has reported, quoting a report published by Enders Analysis.

In England, the Premier League has been suspended till April 30. However, with the news of an up to six-month lockdown in resumption of the league anytime soon is not in sight.

“Assuming a worst-case scenario of a four-month suspension of all sports coverage (British and foreign), with all sports subscribers pausing their contract and wholesale clients being allowed to follow suit, Sky would lose £700m and BT £228m in revenues,” Enders Analysis has stated

“The hypothesis informing Governments assumes an initial three-month long lockdown,” adds Enders Analysis, publishers of the report. “Group activities of 25 people involving close physical contact without protection will not plausibly be the first to be allowed when when some social life resumes.”

The report further suggests that the players need to play their part as clubs struggle economically, with wages accounting for 59% of revenues across the Premier League, and adds that beyond July Sky and BT will start saving money if sport remains off screens as upcoming rights payments would be postponed or cancelled.

In July, Sky and BT will have a payment due for the Premier League as the six-month licence fee for the first half of the 2020-21 season. It would amount to about £530m in total. Besides, BT’s annual bill to Uefa for the Champions League rights is £394m.

For the advisory to the players on suggested pay cut, the report states, “football’s cost structure is pretty simple: most of the receipts flow into players’ pockets. The best solution is collectively negotiated pay cuts, but negotiating pay cuts with players is as difficult as herding cats.”