BT Group has entered exclusive talks with Discovery to create a new sports and entertainment joint venture, which will combine BT Sport with Eurosport in the UK.
The telecoms company has been in talks with potential suitors for its sports business for more than a year, including the sports streaming service DAZN.
The deal, which is expected to be sealed in Q1 and is subject to regulatory approval, would unite events such as the Olympic Games, Premier League, UEFA Champions League, tennis Grand Slams, and more.
It would operate as a 50/50 joint venture and enable BT Sport to hold on to its existing major sports broadcast rights, while allowing customers to access Discovery+.
BT Group launched BT Sport in 2013 as a means of attracting broadband customers that it had been losing to rival Sky.
It acquired rights to show Premier League (which it shares with Sky Sports and Amazon Prime) and Champions League matches, and had succeeded in attracting a peak of 3.5 million subscribers in 2016. In 2021 this had fallen to 1.6 million.
BT Sport offers small profit margins against a backdrop of the escalating cost of sports rights, leading BT Group to put the focus on rolling out its next generation of broadband infrastructure.
"The proposed joint venture with Discovery, Inc. would create an exciting new sports broadcasting entity for the UK and would act as a perfect home for our BT Sport business,” BT Consumer chief executive Marc Allera said.
“With a shared ambition for growth, as well as the combination of our world-class sports assets along with Discovery's premium sports and entertainment content, our customers will benefit from even more content in more places."
For Discovery, premium sports rights are viewed internally as an important driver of subscriptions to its streaming app, Discovery+, which launched in the UK in late 2020.
Sports content also provides Discovery with opportunities to scale its growing sports sponsorships business.
Discovery acqired Eurosport in 2014, and it its TV and online properties now have an audience of more than 50 million viewers per month.
“We are excited about this opportunity with BT Group to offer consumers a stronger and simplified combined sport offering in the UK and Ireland, and, more broadly, to advance our strategy of bringing sports and entertainment to more consumers on the platform of their choice,” Discovery Streaming & International president and chief executive JB Perrette said.
“We are aligned with BT Group on a shared vision to maximise the value and appeal of our respective UK sport assets, and we look forward to concluding a deal in the coming weeks.”
DAZN, which is often described as the "Netflix of sport", has coveted Premier League rights in the UK for some time to grow its own subscriber base.
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