BT TV’s power team

Delia Bushell

Kate Bulkley profiles the top trio at BT who are tweaking Sky’s tail and leading the telco’s TV strategy.

When the auction for Premier League football rights reached its climax last month a tremor passed through the UK television business, not to mention the City. But, for the BT bidding team, the breakdown of the £5.136 billion (€7.02 billion) figure for the 2016-19 matches produced a stunned silence. BT had paid a little less than £1bn for two of the TV packages; its rival, Sky, had stumped up a staggering £4.2bn for five packages of rights.

Sky had secured more games – 126 games per season versus 42 for BT – but at a spectacular cost: £11.05m per game; an overall increase of 85% from the last auction in 2012. BT Sport’s new package will cost £7.6m per game, an 18% increase per match and an overall rise of 30% for Premier League coverage.

The following day, BT’s shares rose while Sky’s dipped. In the Premier League’s blind bidding system, BT Sport had gambled and won.

It was quite an initiation for BT Sport’s trio of talent – BT Group CEO Gavin Patterson, head of BT Consumer John Petter and managing director of BT TV and BT Sport Delia Bushell. This was the first time the top team overseeing BT’s TV and broadband push had worked on the auction together.

Coming on the heels of BT’s £12.5bn acquisition of UK mobile operator EE, it had been a spectacular few weeks. Working with the chief finance officer of BT Group and the finance and strategy director of BT Consumer, Patterson, Petter and Bushell had decided to take a “disciplined approach” to the Premier League bid.

Having already secured exclusive rights to Champions League and Europa League football, they believed that BT had “optionality” as to what to go for this time around, says Bushell.

“We’ve always taken on a position as a price challenger to make premium UK sport more accessible to fans again. We are quite pleased with the outcome,” she adds, with a broadening smile. “And we’ve all been quite surprised by just how much Sky has bid.”

When BT burst on to the TV sport scene four years ago, the scepticism was evident. It was splashing billions on rights, high-tech studios and big-name presenters. The naysayers wondered if a phone company could offer a credible TV sports package and, crucially, succeed against Sky. The latter had already defeated challenges from ITV Digital, Setanta and ESPN.

At the time of the BT Sport launch, Patterson, then head of BT Consumer, led a charm offensive directed at journalists, analysts and TV viewers. He promised that his new channel would not only bring sport “back to the British public”, but would also have a warmer and more inclusive approach than Sky’s “cold” presentational style.

The heavily marketed launch – offering premium sport “free” to BT broadband subscribers – changed BT’s fortunes. It reversed what had been a decade-long losing battle against Sky for broadband customers. And in the latest quarter of this fiscal year, 45,000 TV customers were added, compared with 21,000 in the same quarter in 2012.

Top-line growth had been flat prior to BT Sport’s arrival, but, in the most recent quarter, revenue grew by 7%. Given the competitive nature of the UK’s TV and broadband market, this represents an impressive turnaround.

When BT Sport made its debut, Bushell was in Italy working for Sky Italia as Chief Commercial Officer. She had flown back to Britain the first weekend following the launch to be confronted by BT Sport’s marketing push. “I remember seeing all the posters and thinking that this was a big step change for BT,” she recalls.

Bushell, 42, joined BT eight months ago to run both the TV and sports businesses. Previously, they had been run separately. She had worked at Sky for 14 years across both the channels and the broadband and telephony businesses.

On BT’s rivalry with Sky, she says: “Sky is defending a very high consumer price point on TV. It needs to invest quite heavily to defend that, while we at BT have a very different set of choices.

“At the moment, you’re seeing Freeview upgraders or pay TV down-spinners saying, ‘I don’t really spend all that much time watching TV. I am spending a lot of time online, on YouTube and browsing the web, so how much do I want to be paying for TV?’”

Bushell’s nous about how to bundle services attractively should complement the strengths of her bosses, Petter, 44, and Patterson, 47. But both men have had similar career paths. Each worked at Proctor & Gamble, a company well known for training its executives in strategic thinking. They were also colleagues at Telewest, the UK cable TV company destined to be subsumed into Virgin Media.

Virgin gave them valuable experience in bundling telecommunications and TV services in competition with bigger rivals. “They learned their craft of competing with Sky in the trenches of Telewest. That informs their knowledge of their enemy,” says one senior TV executive, who knows them well. “They utterly blindsided Sky in this last auction. This is because they have confidence and conviction in what they are doing,” adds the source.

So how does the head of all BT’s consumer services regard business problems such as competing with Sky? As Petter says: “Our approach to all of this is governed by strict economic rules, vigorous pre-market testing and a very rational attitude to the whole study of how to get this right.”

The full article, written by Kate Bulkley @katecomments, features in the March issue of Royal Television Society’s Television magazine.