LONDON (AP) Shares in British Sky Broadcasting PLC took a battering Monday after rival BT PLC snatched the U.K. television rights to European Champions League soccer, Europe's top club competition.
The loss of the rights, which BSkyB had shared with terrestrial broadcaster ITV PLC, represents a big blow for the satellite broadcaster as it has built its business over the past two decades largely on the back of its acquisition of sports rights.
Soccer rights, in particular, are one of the main reasons why the broadcaster has seen its subscriber base rise to around 10 million.
Investors are worried that BSkyB, whose biggest shareholder is Rupert Murdoch's 21st Century Fox Inc., one of the two units created following the split of News Corp., will face additional financial pressures to maintain its array of sports rights and that some subscribers may switch to BT.
BSkyB shares closed 10.9 percent lower at 829 pence, meaning around 1.5 billion pounds ($2.4 billion) was wiped off the company's value.
"With analysts and commentators describing this as a game changer, finding reasons to own BSkyB seem harder to come by today than before," said David White, a trader at Spreadex.
This isn't the first time that BT, the former nationalized British telecommunications company that only launched its sports television channels in August, has made a foray into BSkyB's traditional domain.
Earlier this year, BT bought a package of rights to the English Premier League considered the world's most popular national soccer league that it hopes will help it grow its broadband business. Sky, though, retains the lion's share of those rights.
BT along with public broadcaster BBC also bought the rights to England's FA Cup, the world's oldest domestic soccer competition.
BT's capture of European soccer's Champions League from the start of the 2015-16 season, though, is a far more notable achievement and represents the most high-profile defeat for Sky since its own capture of English Premier League rights in 1992. The Champions League, won last season by Germany's Bayern Munich, features Europe's leading teams and runs alongside domestic competitions on Tuesday and Wednesday evenings.
"The tastiest battle going on this season is not on the football pitches or even the dugouts, but between BT and Sky as they continue to slug it out over the U.K.'s sports fans," said Alastair McCaig, market analyst at IG.
BT is paying 1.076 billion euros ($1.44 billion) more than double the current deal for the three-year exclusive rights to the Champions League and the junior club tournament, the Europa League. It is the first time a single U.K. broadcaster has won exclusive live rights for each season's 350 matches from the two tournaments.
BSkyB said it thinks BT is paying "far in excess" of its own valuation for the rights.
"We take a disciplined approach and there is always a level at which we will choose to focus on something else," BSkyB said in a statement. "If we thought it was worth more, we'd have paid more."
The loss of the rights is also a blow to ITV. Champions League soccer has been a midweek staple for ITV for the best part of two decades. Unlike BSkyB, which has largely used sports rights to grow its subscriber base, ITV has benefited from the premium advertising income that the Champions League provided.
ITV shares faltered too Monday, ending 1.6 percent lower at 187 pence.
Although there were concerns among some of BT's shareholders over the amount it is splashing out, investors appear to be giving the company the benefit of the doubt BT shares were up 0.5 percent at 374 pence.
Investec media analyst Steve Liechti said the deal was a "hugely important showcase for BT's long-term intent and the competitive threat to Sky."
This story has been automatically published from the Associated Press wire which uses US spellings