FTSE 100 OPEN: BSkyB slips after Premier League deal announced
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British Sky Broadcasting and BT were the biggest fallers in early trading after both announced they had won rights to broadcast Premier League football from 2013-14 season in a multi-billion pound deal.
The deal is reportedly above analysts’ expectations, which will see Sky pay £760m per year until the 2015-16 season ends.
Jeremy Darroch, chief executive of Sky, says: “In what was a very competitive tender process, we are pleased to have secured the combination of rights that we wanted, providing certainty for us and our customers.
“Whilst the cost is higher, we have capacity for this increase through the combination of excellent work on cost efficiency across the business and choices over other future spending. As a result, we remain confident of delivering our financial plans, in line with our expectations, unchanged, in each year of the new deal.”
The news saw British Sky Broadcasting drop by 7.1% to 646p (at 0830 BST).
BT, meanwhile, acquired a smaller package of Premier League game, which will cost the telecommunications company £246m per year over the same period as the Sky deal.
The company claimed the deal would reduce earnings before interest, tax, depreciation and amortisation by £100m and normalised free cash flow by £200m in 2013/2014. BT saw its share price drop by 3.4% to 201.9p.
Tullow Oil dropped 2.6% to 1,419p, luxury goods company Burberry fell 2.2% to 1,311p, as microchip manufacturer Arm Holdings lipped by 1.6% to 504p.
Hargreaves Lansdown was the biggest climber early on, with share price up 0.8% to 478.9p (at 0826 BST), while drugmaker AstraZeneca rose 0.7% to 2,704.5p.
Gold producer Polymetal International, consumer goods company Unilever, and real estate investor Hammerson all grew by 0.6% to 800.5p, 2,096p and 415.5p, respectively.
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