The UK’s Competition and Markets Authority (CMA) regulator has today (July 22) announced its approval of the planned joint venture (JV) between multinational media and entertainment giant Warner Bros. Discovery (WBD) and UK telecoms giant BT Group.
It was announced in May that the two companies had agreed to form a 50/50 JV to provide a new premium sports offering for the UK and Ireland, transferring BT Group’s BT Sport pay-television business to WBD and combining the sports properties of the two.
However, at the end of May, the CMA launched an investigation into whether the move would result in “a substantial lessening of competition within any market or markets in the United Kingdom.”
Comments on the transaction from any interested party were invited between June 1 and 17, with a decision about the first phase of the inquiry per the above scope scheduled to be announced on July 28.
That decision came early, with the CMA saying in its announcement today that the full text of its decision will be published “shortly.”
WBD and BT Group have welcomed the decision and indicated that they intend to complete the creation of the JV in the coming weeks.
Through the collaboration, BT Sport and the UK version of WBD’s Eurosport pan-European broadcaster will be combined to create “one of the most extensive portfolios of sports rights in the UK and Ireland.”
The two networks will remain separate initially before eventually being brought together under one brand.
The JV’s board of directors will be equally represented by appointees of WBD and BT, with its chair to be nominated by each business on a rotating basis.
The first chairperson will be Marc Allera, chief executive of BT’s consumer division, while the new management and delivery of the JV will be led by Andrew Georgiou, president and managing director of WBD Sports Europe, who will also sit on the board.
Georgiou said: “Combining the capabilities, portfolios, and scale of BT Sport and Eurosport UK will be a big win for fans in the UK & Ireland, offering a new destination that will feature all the sport they love in one place.
“We now look forward to closing the transaction and having the opportunity to further engage all stakeholders in the process of forming and developing the JV."
Allera added: "Today is a huge milestone, as we now look toward day one of the new business, which we hope to be in the coming weeks.”
The CMA investigation was the latest in a protracted saga of what would happen to BT Sport after BT Group announced last year that it had appointed investment bank Lazard to assist with the potential sale of a stake in its pay-TV arm and that it was in talks with several interested parties.
Discovery, prior to its $40+ billion acquisition of WarnerMedia in April, emerged as a suitor in December after DAZN Group, the international sports media company and parent of the over-the-top subscription platform, had been in advanced talks with BT for several months but failed to conclude an agreement.
It was announced at the start of February that Discovery and BT had entered into exclusive talks to create a JV.
The finalized plans for the deal announced in May will see BT receive £93 million ($111 million) from WBD and up to around £540 million by way of an earn-out, subject to certain conditions being met.
BT will retain a 50% interest in the JV, and WBD will be granted a ‘call option’ to buy BT’s interest, exercisable at specified points in the first four years of the tie-up and subject to certain conditions and arrangements.