Britain's BT Group and BSkyB were fighting over the rights to broadcast top European club rugby matches today, with both claiming to have signed exclusive deals to show some of the same live games.
The dispute erupted after BT snatched the broadcast rights for domestic English Premiership rugby from BSkyB with a £152 million ($NZ298.5 million) four-year contract that starts in 2013, extending a spending spree to boost its internet TV offering.
In response, satellite broadcaster BSkyB said it had agreed a new four-year deal with the ERC to show European club competitions from 2014, bringing it into dispute with BT which claimed its agreement also included European games involving top English clubs.
BT is increasingly moving in on BSkyB's turf as it seeks to use live sporting action to increase take-up of BT Vision, which has 728,000 subscribers. BSkyB has more than 10 million customers and has long dominated the sports rights market.
"Someone, somewhere, is going to be disappointed," said an industry source of the dispute.
The ERC, the Dublin-based group which runs European rugby competitions, questioned the BT deal, saying it was the only body authorised to sell rights to matches in the Heineken Cup and Amlin Challenge Cup, the two continental competitions.
However, the Premiership, which is pressing for reform of European club rugby, said it had informed the ERC in June that it planned to quit its tournaments in 2014.
"As a result of notice being served, ERC is not entitled after 2014 to sell the broadcast rights of matches involving Premiership Rugby clubs," it said in a statement, adding the BT deal would help provide financial support for future European competitions.
The ERC is due to meet next week to discuss the future of European club rugby.
BT MOVES INTO SPORT
In June, BT agreed a to share Premier League football games with BSkyB from next year in a three-year deal costing the two companies £3 billion.
BT said that it would show up to 69 Aviva Premiership Rugby matches and the JP Morgan Asset Management Sevens from the 2013/14 season.
The live Aviva Premiership rights are currently split between BSkyB and Disney's ESPN. BSkyB has been broadcasting games since 1994.
Marc Watson, chief executive of BT Vision, said that rugby union was entering a thrilling phase, with England hosting the World Cup in 2015 and rugby featuring in the Olympics in 2016.
"We will also be bringing all of the action together in one place and will look to distribute it on a variety of platforms," he said.
Clubs in the 12-team Premiership could receive an average increase of 50 percent to their TV income from the new deal, a spokesman for the league said.
BT will use its customer network to promote the sport further and will work with clubs to improve the infrastructure at their stadia.
Rugby union clubs still have small turnover compared with their English football counterparts, but the game has come a long way in commercial terms since the professional era began in the mid-1990s.
Will Draper, an analyst at Espirito Santo Investment Bank, said the deal was significant in itself and as a sign that BT was willing to compete for other content.
"The rugby fan base is much smaller than football's, but it's very dedicated and very loyal - and very concerned about watching the sport on TV," he said, adding that the sum paid was not out of kilter with other sports rights deals.