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BT launches sports TV channels in battle with Sky

media captionJake Humphrey introduces the new BT Sport studios

Telecoms giant BT has launched its UK sports channels in a challenge to the two-decades-long sports-TV dominance of Sky.

Sky has already seen off ITV Digital, Setanta and ESPN, which all temporarily entered the pay-TV football market.

Marc Watson, BT's TV chief executive, said the firm was taking the "long-term view" for its sports business.

But Sky Sports managing director Barney Francis said he "relished the challenge" from BT Sport.

The BT channels will be free to everyone on their first day. Sky Sports will later be offering a day of free viewing on 17 August, the first day of the Premier League.

Studio investment

BT has spent £738m over three years for the rights to 38 live Premier League matches a season. while Sky has paid £2.3bn for 116 matches a season.

Over the past year, BT has also bought up the rights to Premiership Rugby and a host of other sports such as Moto GP, as well as taking over ESPN's UK sports channels.

Both BT and Sky have been busy over the summer creating eye-catching broadcasting studios for the forthcoming 2013-14 Premier League season.

Last week, BT said it had signed up more than 500,000 subscribers to its television sports channels.

image captionBT Sport has run an extensive multi-media ad campaign

But the majority of its subscribers are existing BT broadband customers, who can sign up and stream BT Sport for free on their PC or Mac.

BT Television Chief Executive Marc Watson described the launch as an "important strategic move" for the company.

Speaking to the BBC News Channel, Mr Watson was unable to say how many new Sky Sports customers had signed up, but said it was "a lot".

"The proposition is generating a lot of interest", he continued, "Four in five households have broadband - only one in five takes premium sport".

Meanwhile, Sky's Mr Francis said that for more than two decades his firm had been presenting UK and international sport "in an innovative and entertaining way".

He added: "We have had plenty of challenges in the past, we relish a challenge, it gets us excited and invigorated for the coming season."

Advertising campaigns

Media analyst Steve Hewlett said BT had invested £1bn in the project and was paying £450m to £500m a year on sports contents.

That sport outlay would, he said, lead to an annual loss of between £250m to £300m.

media captionBT TV chief executive Marc Watson describes the launch of BT sport as an "important strategic move"

But he said the move was to prevent it losing its broadband customers to Sky, which could otherwise have cost it up to £700m a year.

Mr Hewlett said that the underlying battle between the two firms was for supremacy in the triple-play market - the bundling of television, telephone and broadband.

Sky moved into BT's telephony and broadband domain in 2006. Now BT has moved into Sky's sporting territory.

The battle has also been fought out on billboards across the UK, with Manchester United's Robin van Persie, Manchester City's Joe Hart and Tottenham's Gareth Bale featuring for BT, while Sky has splashed out on the services of the recently-retired David Beckham.

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