Kate Bulkley, Media Analyst.

BT TV’s power team

By Kate Bulkley

Royal Television Society

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For RTS March 12, 2015

Kate Bulkley profiles the top trio at BT who are tweaking Sky’s tail and leading the telco’s TV strategy

Gavin Patterson

When the auction for Premier League football rights reached its climax last month a tremor passed through the UK television business, not to mention the City. But, for the BT bidding team, the breakdown of the £5.136bn figure for the 2016-19 matches produced a stunned silence. BT had paid a little less than £1bn for two of the TV packages; its rival, Sky, had stumped up a staggering £4.2bn for five packages of rights.

Sky had secured more games – 126 games per season versus 42 for BT – but at a spectacular cost: £11.05m per game; an overall increase of 85% from the last auction in 2012. BT Sport’s new package will cost £7.6m per game, an 18% increase per match and an overall rise of 30% for Premier League coverage.

The following day, BT’s shares rose while Sky’s dipped. In the Premier League’s blind bidding system, BT Sport had gambled and won.

It was quite an initiation for BT Sport’s trio of talent– BT Group CEO Gavin Patterson, head of BT Consumer John Petter and Managing Director of BT TV and BT Sport Delia Bushell. This was the first time the top team overseeing BT’s TV and broadband push had worked on the auction together.

Coming on the heels of BT’s £12.5bn acquisition of UK mobile operator EE, it had been a spectacular few weeks.

Working with the Chief Finance Officer of BT Group and the Finance and Strategy Director of BT Consumer, Patterson, Petter and Bushell had decided to take a “disciplined approach” to the Premier League bid.

Having already secured exclusive rights to Champions League and Europa League football, they believed that BT had “optionality” as to what to go for this time around, says Bushell.

“We’ve always taken on a position as a price challenger to make premium UK sport more accessible to fans again. We are quite pleased with the outcome,” she adds, with a broadening smile. “And we’ve all been quite surprised by just how much Sky has bid.”

Click to read more from Television magazineWhen BT burst on to the TV sport scene four years ago, the scepticism was evident. It was splashing billions on rights, high-tech studios and big-name presenters.

The naysayers wondered if a phone company could offer a credible TV sports package and, crucially, succeed against Sky. The latter had already defeated challenges from ITV Digital, Setanta and ESPN.

At the time of the BT Sport launch, Patterson, then head of BT Consumer, led a charm offensive directed at journalists, analysts and TV viewers.

He promised that his new channel would not only bring sport “back to the British public”, but would also have a warmer and more inclusive approach than Sky’s “cold” presentational style.

The heavily marketed launch – offering premium sport “free” to BT broadband subscribers – changed BT’s fortunes. It reversed what had been a decade-long losing battle against Sky for broadband customers. And in the latest quarter of this fiscal year, 45,000 TV customers were added, compared with 21,000 in the same quarter in 2012.

Top-line growth had been flat prior to BT Sport’s arrival, but, in the most recent quarter, revenue grew by 7%.

Given the competitive nature of the UK’s TV and broadband market, this represents an impressive turnaround.

When BT Sport made its debut, Bushell was in Italy working for Sky Italia as Chief Commercial Officer.

She had flown back to Britain the first weekend following the launch to be confronted by BT Sport’s marketing push. “I remember seeing all the posters and thinking that this was a big step change for BT,” she recalls.

Bushell, 42, joined BT eight months ago to run both the TV and sports businesses. Previously, they had been run separately.

Delia Bushell

She had worked at Sky for 14 years across both the channels and the broadband and telephony businesses. The majority of her time at the satellite broadcaster was spent in the UK, but she was based in Ireland for two years as Managing Director of Sky Ireland and spent almost three years at Sky Italia. Some in the TV business claim that Bushell knows less about the content side of the business than the commercial side. These critics complain that BT still lacks a “content champion”.

But Bushell is quick to highlight her content credentials.

Early on in her Sky career, she worked across Sky’s joint-venture businesses and channels. She turned Sky Travel into a profitable business, as well as launching Sky Freeview channels Sky News, Sky Travel and Sky Sports News.

Bushell then ran commercial affairs for Dawn Airey, at that time, the head of channels and services.

Bushell says she is a lover of high-­quality drama and name checks Wolf Hall, The Fall and The Honourable Woman.

Under her leadership, Sky’s broadband business grew from a standing start to more than 3 million subscribers.

Bushell met her husband, Griff Parry, when they were management consultants at Arthur D Little. Both then worked at Sky for several years, but in very different roles. Parry was at Sky for more than a decade and subsequently launched a games development start-up while Bushell was working at Sky Italia and the couple and their three daughters lived in Milan.

Bushell smiles when she admits she is watching more sport on TV – much to the delight of Parry – but she is no sport ingénue. She has been a José Mourinho fan since her early years at Sky and even has his autograph.

On BT’s rivalry with Sky, she says: “Sky is defending a very high consumer price point on TV. It needs to invest quite heavily to defend that, while we at BT have a very different set of choices.

“At the moment, you’re seeing ­Freeview upgraders or pay-TV down-­spinners saying, ‘I don’t really spend all that much time watching TV. I am spending a lot of time online, on YouTube and browsing the web, so how much do I want to be paying for TV?’”

Bushell’s nous about how to bundle services attractively should complement the strengths of her bosses, Petter, 44, and Patterson, 47.

The latter pair have very different personal styles: Patterson is charismatic and outgoing; Petter, who has a mild speech impediment, is cerebral, with a dry wit.

But both men have had similar career paths. Each worked at Proctor & Gamble, a company well known for training its executives in strategic thinking. They were also colleagues at Telewest, the UK cable TV company destined to be subsumed into Virgin Media.

Virgin gave them valuable experience in bundling telecommunications and TV services in competition with bigger rivals.

“They learned their craft of competing with Sky in the trenches of Telewest. That informs their knowledge of their enemy,” says one senior TV executive, who knows them well. “They utterly blindsided Sky in this last auction.

“This is because they have confidence and conviction in what they are doing,” adds the source.

John Petter

Petter’s taste in TV runs to “quirky, independent film” (he is a fan of BT TV’s Curzon cinema channel) and watching his team, West Ham. Petter and Bushell are both Oxford history graduates. At a recent meeting they were in their comfort zone, comparing notes about how Thomas Cromwell was portrayed by Mark Rylance in Wolf Hall.

Petter’s office on the seventh floor of BT Centre is dominated by a mural littered with symbols representing football and rugby clubs.

The BT marketing department created the mural for a customer competition, but Petter seems to appreciate its intricate and brain-teasing nature.

“It’s a bit of a test, actually,” he quips, subtly putting his guest on edge.

So how does the head of all BT’s consumer services regard business problems such as competing with Sky?

“Our approach to all of this is governed by strict economic rules, vigorous pre-market testing and a very rational attitude to the whole study of how to get this right,” he says. Bushell and Petter are keen to boost the profile of BT TV beyond premium sport. BT recently added Netflix to its offer; Sky Sport 1 and 2 are part of the BT TV line-up, and BT customers can now watch on their portable devices.

More interactive and value-added capabilities that leverage BT’s fibre broadband network – such as picking which camera angles to follow – will be added from this summer.

BT TV will “enhance its entertainment offer”, says Bushell, but she declines to be drawn on whether this means more third-party channels and services, such as Amazon Prime – or commissioning exclusive content and creating bespoke services.

“Having the right range of entertainment and documentary channels in the portfolio is key to future growth,” she says, diplomatically.

“We are open to carrying the Sky channels and open to investing ourselves, but no decision has been made that we can communicate.”

Patterson, who read chemical engineering at Cambridge, has had a stellar rise at BT over the past 10 years. He was promoted from Managing Director of the company’s consumer unit to CEO of BT Retail.

There, he led the drive to join the YouView consortium as a founder member and orchestrated the original £2bn football broadcasting challenge to Sky and the launch of BT Sport.

In September 2013, after then-CEO Ian Livingstone left BT to join the Government, he was handed the top job of BT CEO.

Often hailed for his leading-man good looks, Patterson, a passionate Liverpool FC fan, is reckoned by his peers to be a brilliant front man and a very adroit operator.

With four children under the age of 15, he is a committed family man.

Patterson clearly sees the situation between BT and Sky as a strike back against Sky’s canny move nearly 10 years ago to start offering free broadband to its TV customers.

“Since we launched BT Sport, just over a year ago, 25,000 commercial premises have signed up, with one in three pubs showing it, and that’s more than Sky,” Patterson told analysts at the most recent financial results call. “Viewing figures have also been encouraging, with our Premier League viewing up 17% year-on-year.”

Patterson, Petter and Bushell are an experienced top team that clearly has Sky in its sights.

BT has the financial firepower (its market capitalisation is £37bn, compared with Sky’s £16.5bn) and the strategic confidence to make an even bigger impact on how TV is bundled and sold in the UK. Gary Lineker is rumoured to be joining BT Sport.

Bushell will be looking closely at how to leverage BT’s TV assets across the 24 million EE mobile phone customers it recently acquired.

“Ultimately, these are the three top people who are dealing with the Murdoch machine that is Sky,” says one senior TV executive. “The fact that they are doing so on their own terms is really powerful and interesting to watch.”

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