Discovery in talks with BT Sport to hijack sale to DAZN

US media group Discovery is in talks over a deal to partner with BT Sport, in a move that would hijack the British television network’s £600m sale to sports streaming service DAZN.

Discovery, which owns the Eurosport channels, has offered to create a joint venture with UK telecoms group BT, in a new effort that would create a powerful participant in British sports broadcasting, according to multiple people familiar with ongoing talks.

BT Sport has the rights to screen English Premier League and Europe’s Champions League football matches in the UK, while Discovery has a long-term deal to screen the Olympic Games across Europe.

BT executives have begun to take the option of a partnership with Discovery more seriously over the past two months, after talks over the outright sale of its sports channels to DAZN, owned by billionaire Sir Leonard Blavatnik, have become stuck over commercial details.

The BT Sport service is tied to the company’s broadband subscribers, which has led DAZN to demand assurances over revenues if they bought the sports channels, people familiar with the talks said. BT, meanwhile, wants to ensure its subscribers will continue to have access to DAZN’s services.

Wrangling over these details has held up the deal. One person briefed on the talks said BT planned to make a decision on whether to sell to DAZN or partner with Discovery by the end of the year.

The Sunday Telegraph first reported on the joint venture talks. BT, Discovery and DAZN declined to comment.

Discovery is also seeking a multibillion-dollar deal to take over WarnerMedia, the group currently owned by AT&T. That move, spearheaded by Discovery’s chief executive, David Zaslav, would create the world’s second-biggest media company behind Disney.

For DAZN, a failure to acquire BT Sport would be a blow in the unprofitable company’s hopes to grow into a serious competitor to existing media giants as it seeks an IPO in the coming months.

DAZN’s new chair, Kevin Mayer, is an adviser to Discovery. A person close to the company said the parties had held discussion to ensure there was no conflict of interest in relation to Mayer’s various roles.

BT proved to be the most formidable competitor to Sky in UK sports broadcasting, after investing more than £2bn to take the fight to the media company now owned by Disney.

Its strategy was to build a viable sports business alongside its TV service, but also to defend its core broadband base against Sky, which had been offering free broadband to its sports subscribers.

It has sought to reduce the financial burden of its sports operation in recent years and under Marc Allera, chief executive of BT’s consumer unit, has transformed a division that lost £400m a year in its infancy into a business that has broken even and has almost 2m subscribers.

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