Media giants disrupt market with content sharing deal
Annual Review 2017-2018
In a world where ‘content is king’, the battle among media companies for the rights to screen original entertainment and live sporting events has never been more intense.
When broadcast giants BT Group and Sky announced a multiyear content cross-supply agreement, the market stood up and took notice.
CMS London partner John Enser said, “For these two fierce rivals to find middle ground was a significant development in the market. They each pay significant sums for the rights to exclusive content and need to balance the benefits of exclusivity with the opportunity to earn revenue from the widest possible base of their own and third party customers.”
Under the deal, which was agreed at the end of 2017, BT customers will be able to watch Sky content as an integrated part of BT’s TV platform. Sky will make its full NOW TV service available on BT TV’s set-top box. NOW TV provides access to Sky’s most popular content including Sky Sports, Sky Cinema and entertainment channels including Sky Atlantic. BT will be able to sell NOW TV subscriptions directly to its customers.
At the same time, BT has agreed to wholesale its BT Sport channels, which include exclusive live UEFA Champions League and Premier League football, to Sky, allowing Sky to sell these channels directly to its satellite customers. CMS advised longstanding client BT on the deal, working closely with its in-house team led by Chief Counsel Matthew Phillips.
We weren’t able to rely on standard negotiating positions as each side was both content seller and platform owner. We had to drill down into very complex detail, particularly in terms of future market developments. Time pressures were acute as the market is evolving rapidly and a lot of attention was being paid to the then forthcoming auction of the Premier League’s UK media rights.
John Enser, Partner, CMS London
It is expected that the new services will be available to customers from early 2019.