CMA Launches Investigation into Proposed Warner Bros Discovery-BT Sports Joint Venture

The Competition and Markets Authority (CMA) is investigating the proposed joint venture between Warner Bros Discovery and BT Group which aims to create a new premium sports offering for the UK and Ireland.

The CMA said that it notified the respective parties and is inviting comments on the transaction until June 17.

Under the deal, which was announced last month (May 2022), BT Sport and Eurosport UK will be brought together to form a premium sports joint venture for customers in the UK and Ireland which will be owned 50:50 by BT plc and Warner Bros Discovery.

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. BT will receive £93m from Warner Bros Discovery and up to approximately £540m by way of an earn-out from the joint venture, subject to certain conditions being met. BT will retain a 50% interest in the joint venture, and Warner Bros Discovery will be granted a call option over BT’s interest in the joint venture, exercisable at specified points in the first four years of the joint venture.”

The investigation is the latest in a lengthy story of what will 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 of BT Sport and that it was in talks with several interested parties.

BT has subsequently said that the joint venture is not the first step of a planned exit strategy from the sports market as had been reported and insisted that it will continue to invest in rights and grow its offering.