Amazon’s ground-breaking deal for Premier League football rights has compounded a difficult period for BT chief executive Gavin Patterson, which has included massive job cuts, accounting scandals, record fines, and slower revenues.
BT has had its grip loosened on Premier League football rights in the UK, the centre-piece of its dominant consumer content strategy, as Amazon announced a deal to live-stream exclusive coverage of 20 Premier League matches per season online. The move compounds a difficult period for the UK incumbent’s beleaguered boss, Gavin Patterson.
Amazon’s ground-breaking contract splits the dual hegemony of BT and its traditional rival Sky over Premier League football rights in England. Amazon’s deal, which runs from the 2019/20 season, is somewhat different; it will stream all 20 Premier League club across two full rounds of league matches during the run-up to the packed Christmas football schedule.
It will mark the first time every game in a match-week has been screened. Live streams will be available for free for Prime customers; coverage will also include weekly highlights through the season.
The nature of the deal has put BT’s own takings from the reshuffled Premier League football rights in the shade. BT is spending an additional £90 million on a further 20 football matches from next season, taking its total Premier League expenditure to £975 million over three years; it will now show 52 games during the course of the season, compared with Amazon, which has a starting-count of 20.
The change to the Premier League broadcasting schedule in the UK was expected, with Amazon in negotiations for some months, but it has turned up the heat on BT chief executive Gavin Patterson, who has staked much on the British telco’s revised consumer strategy, as its share price has plummeted to a six-year low, and investor support has crumbled in tandem, on the back of a catalogue of setbacks.
The Financial Times claimed this week at least five of BT’s 20 largest shareholders are losing patience with Patterson, following massive job cuts, a £225 million accounting scandal in Italy, a record £42 million fine from UK regulator Ofcom, and declining wholesale and government revenues. BT chairman Jan du Plessis has been called to discuss his future.
Things came to a head in May, after Patterson re-launched the group’s consumer strategy, by its EE and BT consumer and enterprise divisions, respectively, and converging super-fast fixed and mobile broadband under the new BT Plus brand. Annual fixed and mobile infrastructure investment was capped at £3.7 billion, and 6,000 new staff were promised in network deployment and customer service.
Patterson said: “BT is uniquely positioned to be a leader in converged connectivity and services. We are a clear market leader in terms of the scale of our customer relationships.”
But the move, which united its top-end EE and BT products in a premium converged package, was attended by and flat-to-lower revenue and profits, a pared back outlook, and, more starkly, swingeing job cuts, totalling 13,000 back office and admin roles, its most in a decade, aimed at slashing £800,000 from its bottom line. Days later, news broke from its financial results Patterson had pocketed a £1.5 million bonus and a 1.5 per cent pay rise, taking his annual income to £2.3 million last year.
Patterson, who became BT chief executive in 2013, having headed its retail division previously, has sought to build up BT’s mobile and TV services to complement its broadband and fixed line business. But he has been criticised for staking massive sums on sports rights, primarily, in an attempt to attract customers to its TV service.
“Gavin comes with a consumer background,” one top-30 shareholder told Reuters. “When you look at what the company has to go through over the next several years, which is manage a fibre to the home roll-out, deal with the regulator, carry through a cost-cutting program, it’s not clear to me whether he’s your best choice for that.”
Patterson has credit for the £12.5 billion purchase of British mobile network EE from Deutsche Telekom and Orange, invigorated by 40MHz of 3.4GHz spectrum, secured for £302.59 million in the country’s 5G auctions in April. But shareholder patience has, in the end, grown thin because Patterson has stewarded the company through a disastrous 18 months, when its major scrapes have been avoidable, and is considered ill-equipped to navigate a path away.
On an earnings call, du Plessis responded: “You don’t build great businesses by being fussed about tomorrow morning’s share price. This is a great company, but we’ve got problems and challenges, and we’re going to address them by focusing on the right places, by investing in networks, by investing in converged connectivity, and by reshaping the organisation the way that Gavin announced.”
