BT Sport JV underperforms as World Cup and cost of living hit subs

BT has recorded a loss for the year to March from the now deconsolidated BT Sport JV with Warner Bros. Discovery of £121 million as the outfit struggled with downward pressure on subscriptions from the UK’s cost of living crisis and the impact on European football of the Qatar World Cup.

BT said that the Sports JV’s accounting loss for the year also reflected amortisation of acquired intangibles from BT Sport and Eurosport business transfers, and reduced revenues from accounting adjustments for the off-market minimum guarantee with BT as well as underperformance against business plan.

That underperformance has been driven both by the cost-of-living pressures affecting the sports subscription market in the UK and the impact of a prolonged winter break in European club football from the World Cup.

BT said that the outfit’s performance is expected to recover in the medium to long-term as macroeconomic and inflationary pressures ease and through the JV reducing its cost base to mitigate any future revenue loss.

BT Sport’s revenue for the year to March was recorded as £557 million, with a loss for the year of £121 million. BT recorded a share of total comprehensive losses from the venture of £62 million.

That loss means the value of its equity investment in the venture has dropped from the initial £414 million to £352 million.

Because the Sports JV The Sports JV has a different financial year-end to BT, it has not yet prepared a first set of audited financial statements. BT based its accounting of the loss from the venture on management accounts for the period ending March 31 after making certain adjustments to comply with accounting rules.

TNT Sports will become the new name for BT Sport in the UK & Ireland from July 2023. Warner Bros. Discovery said in February that WBD said the new name “heralds an important step in plans to unite the premium rights from BT Sport and Eurosport under a single offer in the future”.

Under the terms of the JV deal, WBD has an option to buy out BT’s stake after four years.