By Rob Davies
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In the battle for Premier League TV rights, BT reckons it has played a blinder. Like a veteran centre back popping up at the far post to poach a 90th minute winner, the telecoms stalwart delivered a bolt from the blue that surprised spectators.
For a cool ?738million, it gets 38 games a season for three years, including 18 so-called ?first pick? games ? crunch fixtures such as the Manchester derbies.
But yesterday?s 3.54 per cent decline in BT?s share price ? which saw it fall 7.4p to 201.7p ? suggests the market is unsure how it is going to turn its new signing into ready money.
On the ball: Peter Crouch at the launch of BT Vision in 2007
Mark Watson, boss of TV arm BT Vision, says the answer lies in the? ?triple play? marketplace, industry? jargon for internet, TV and telephone in one bundle. This is the Holy Grail for the likes of BT and rivals Virgin Media and BSkyB.
Triple play delivers higher profit margins while helping to retain customers who are less likely to switch supplier if it involves changing multiple services at once.
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?There?s no question that this will help us sell triple play,? says Watson. ?It will get us new customers and allow us to sell new products to those customers.?
The key, says Watson, is BT has taken possession of the ?crown jewels? with so many first pick games.
Referring to Setanta and ESPN, which both struggled to make a commercial success of dedicated Premier League channels, he says BT is in a different position.
?They struggled a bit from the quality of games. We have got half of the crown jewels here and they never had them,? he declared.
Second, while BT Vision has just 700,000 customers, the group?s profile means it can make more people aware of its new offering.
And while its predecessors in the TV rights game sold only one thing, a football channel, BT can use the game?s popularity to sell other products, including those all-important triple play bundles.
BT has considered bidding in previous auctions, but two key changes in the industry have bolstered the logic of getting involved this time.
One is the ?wholesale supply obligation?, the change in the law that forces Sky to offer its sports channels for sale to rival firms.
This is subject to legal challenge, but means BT isn?t just offering a rump of games without giving? customers the chance to buy the lion?s share too.
For the first time, a BT Vision customer will be able to watch nearly any game they like. The flip side of that coin is that BT will also be able to sell its channel to rivals, making money without needing to prise contract customers away from the likes of Sky.
An even larger piece of the puzzle is the fibre network, which is costing the company some ?2.3billion to roll out. Watson says the speed of these connections means BT will be able to offer never-before-seen interactive services capable of enticing households to cough up for fibre.
He won?t say what these might be, but sealing a tie-up with football statistics firms such as Opta could allow viewers to see real time data, telling them how far Gareth Bale has run and how many passes Steven Gerrard has completed.
For the moment, the market is focusing not on benefit but on cost, which is why BT fell out of favour with traders yesterday.
BT insists shareholders will see no impact on dividend payments, but concedes it is likely to suffer a ?100million hit on earnings in 2013-14.
?This is an investment,? says Watson, ?and the business will take a while to build.?
As for rival bidders, BT can claim to have come off better than Sky, which paid ?2.3billion ? about ?700million more than last time ? while giving up half of the first picks.
Insiders say the bidding war was fiercely competitive and so shrouded in secrecy that no firm knew exactly who else was in the race.
Rumoured suitors Apple and Google are thought to have backed out, while Middle Eastern TV channel Al-Jazeera is understood to have been in the mix.
One source suggested that either ITV or Five were involved too, although where either would have found the money is a mystery.
As for those in the know, there were very few. Two Premier League representatives, a handful of lawyers, an independent monitoring trustee and a couple of top-level staff from each bidder is about as far as the grapevine went.
Hence the surprise, even among BT staff, when the time-honoured telecoms provider declared itself a winning bidder.
The Premier League still has an opportunity to build on the ?3billion it has raised.
Before the end of the year it will auction off ?near-live? packages ? replays shown just hours after the event ? and mobile internet packages likely to attract interest from providers wanting ownership of iPad and smartphone rights.
It?s all in a day?s work for a game that seems like the only place still awash with cash in a world struggling to keep its head above water.
For BT, it must find every source of revenue it can to make sure this gamble pays off.
As any Premier League manager would tell CEO Ian Livingston, you?re only judged by results.
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