BT wants a broadband bounce from sport, but may have scored an own goal
BT will hope to attract new subscribers too, but even if it doubles that number to two million, simple arithmetic suggests it would have to charge them close to £30 per month just to cover costs.
Since no one seriously expects anyone to pay that much just for BT’s sports channels – which are still no real match and certainly no substitute for Sky’s – some analysts expect BT to lose in excess of £200m a year on them.
The only way of making sense of this from a BT investor’s point of view is to see it not as a loss but as an investment in improving the position of BT’s core business – broadband, and especially high-speed broadband.
Yep, get that content, drives uptake you know. £200m a year subsidy suggests cheaper prices might be a better option.
And how is that an investment? An investment is finite and generates profit in the longer term, this just ties a £200m a year subsidy around BT’s neck, forever. When can they stop spending it?