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Warner Bros Discovery, BT reach ‘definitive agreement’ on BT Sport joint venture

Warner Bros Discovery could buyout BT during the joint venture's fist four years, while BT could sell its stake or enter an IPO

BT and Warner Bros Discovery have confirmed they will go ahead with a 50:50 joint venture company that will see the operating business of BT Sport transferred to the US conglomerate.

The new offering will include content from both BT Sport and Eurosport, including UEFA Champions League, UEFA Europa League, the Premier League, Premiership Rugby, UFC, the Olympic Games, the Australian Open, the French Open, the Tour de France, Giro d’Italia and the winter sports World Cup season.

The companies said customers who access BT Sport through BT directly, and the majority of BT TV customers, will receive discovery plus as part of their existing subscriptions.

The joint venture (JV) will be structured as a 50:50 joint venture, with each party holding equal voting rights.

Both BT Sport and Eurosport UK will initially retain their separate brands and product propositions in the market before being brought together under a single brand in the future, said the companies.

The two partners plan to enter into distribution agreements with the JV under which they will distribute the combined sports content to new and existing customers on their respective platforms and apps.

As part of the deal, BT will receive £93 million from Warner Bros Discovery and up to approximately £540 million by way of an earn-out from the JV, subject to certain conditions being met.

BT plc will retain a 50 per cent interest in the JV, and Warner Bros Discovery will be granted a ‘Call Option’ over BT plc’s interest in the JV, which it can exercise at specified points in the first four years of the JV.

If the Call Option is not exercised by Warner Bros Discovery, BT plc will have the ability to exit its stake in the JV either through a sale or IPO.

The transaction is subject to customary closing conditions, including approvals by the relevant regulatory bodies and is expected to complete by the end of 2022.

Marc Allera, CEO BT’s consumer division, said “As a global sports and entertainment broadcaster Warner Bros Discovery is the perfect partner to work with us to take BT Sport to the next stage of its growth.  We’re excited to be joining forces to bring the best of BT Sport together with Eurosport UK to create a fantastic new sports offer alongside all the entertainment that discovery Plus has to offer BT customers.”

“I’m incredibly proud of the established, creative and innovative broadcaster that BT Sport has become. We have a brilliant team who are dedicated to broadcasting amazing sporting moments and we look forward to working with Eurosport UK to realise the opportunities that this next stage will bring both our team and our viewers.”

Andrew Georgiou, president and managing director, Warner Bros Discovery Sports Europe added: “We are excited to bring fans a new premium sport offering that brings together everything they love from BT Sport and Eurosport UK. Combining this with our growing portfolio of premium entertainment content promises to deliver consumers a richer and deeper content proposition, not only providing greater value from their subscriptions but bringing sport to a wider entertainment audience.”