Warner Bros. Discovery and the British telecom giant BT Group has confirmed plans to form a 50-50 joint venture to create a new premium sports offering for the UK and Ireland. It will see the transfer of operating businesses of BT Sport Warner Bros. for Discovery, effectively merging the content offerings of both BT Sport and eurosport Britain.
deal was discussed originally reported Negotiations are on for some more time in February.
The joint venture’s portfolio of premium sports rights includes UEFA’s Champions League and Europa League, Premier League matches, Premiership Rugby, UFC, Olympic Games, Tennis Grand Slam Australian Open and the Cycling Grand Tour including Roland-Garros, Tour de France and the Giro Will be included. d’Italia, and the Winter Sports World Cup season.
BT will receive £93M ($113.6M) from Warner Bros. Discovery and approximately £540M ($659.3M) through earnings from JV, subject to certain conditions being met. BT will retain a 50% interest in the joint venture, and Warner Bros. Discovery will be given a call option on BT’s interest in the venture, which can be exercised at specified points in the first four years. If the call option is not exercised, BT will have the ability to exit its stake in the joint venture either through sale or IPO.
The companies said Warner Bros. will directly contribute, sub-license or benefit from their respective game rights and distribution agreements for Discovery and BT UK and Ireland to joint ventures. Upon completion of the transaction, BT Sport’s production and operating assets will transfer to and become a wholly owned subsidiary of Warner Bros.
The deal is subject to customary closing conditions including approval by relevant regulatory bodies and is expected to be completed by the end of 2022.
As part of the transaction, BT and Warner Bros. Discovery will enter into a distribution agreement with JV to become the official UK distributor of JV’s sports channels across both sets of platforms. BT’s agreement with BT will extend beyond 2030, and for the first four years, it includes a minimum annual revenue guarantee of approximately £500M ($610.6M), after which the agreement will transition to a fully transitional arrangement.
The joint venture will also sign a new agreement with Sky for the distribution of the joint venture’s sports content, which will expand beyond 2030. As part of an existing subscription, customers who access BT Sport directly through BT, and the majority of BT TV subscribers are set to receive search+The non-fiction entertainment streaming service that is home to Eurosport’s live and on-demand streaming offers in the UK and Ireland.
Both BT Sport and Eurosport UK will initially maintain their separate brand and product offerings before being brought together under the same brand in the future.
Mark Alera, CEO of 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. Discovery+ We are excited to join forces with Eurosport UK to bring together the best of BT Sport to create an amazing new sports offering alongside all the entertainment that BT has to offer customers.
Andrew Georgiou, President and Managing Director of Warner Bros. Discovery Sports Europe, said: “Combining this with our growing portfolio of premium entertainment content promises to deliver a rich and in-depth content proposition to consumers, not only providing more value than their subscription but also brings sports to a wider entertainment audience.”
The Board of Directors of the Joint Venture shall be represented equally among the appointees of the parties. The Chairman of the Board shall be a Board of Directors nominated by each shareholder in turn, the first of whom shall be Allera.