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Sky shares fall as market weighs soccer rights gamble

Britain’s dominant pay-TV firm Sky was counting the cost yesterday of its record bid to retain the rights for top-flight English soccer, with a falling share price reflecting the challenge of funding the deal.

Despite protests to the contrary, Sky’s willingness to pay £4.2 billion over three years for English Premier League rights shows how the company founded by Rupert Murdoch remains dependent on the sport that helped it to win its way into 10 million homes.

With an 83 per cent jump in the total price paid by Sky, the auction also showed the continued power of exclusive football coverage

Having lost the rights to Europe’s top-tier games to rival BT, Sky went all out in the three-day auction to win the maximum number of domestic games, vowing to cut costs in the rest of the business and raise prices to afford the deal.

Analysts warned, however, that a sharp price increase could prompt some customers to cancel, adding uncertainty to the previously robust earnings power of the FTSE 100 group.

With an 83 per cent jump in the total price paid by Sky, the auction also showed the continued power of exclusive football coverage which, unlike movies, is available on only a few platforms and can attract customers and advertisers alike.

Shares in Sky, which is paying £11 million on average per game, opened down nearly five per cent as the total price rise was more than double that expected by analysts.

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