BT 'changes the game' but at what cost?

£152m deal can transform the Premiership but puts English clubs on collision course with European officials. By Chris Hewett

The immediate reaction to yesterday's announcement of a ground-breaking £152m deal between England's leading rugby clubs and the communications company BT was focused less on what the influx of money might buy than on what it might cost. The future of the wildly popular but commercially underpowered Heineken Cup was under serious threat even before the Premiership fraternity struck gold. Now, it is difficult to imagine how it will survive in its present form.

On the one hand, officials at European Rugby Cup, the organisation charged with running the elite Heineken and second-tier Amlin Challenge tournaments, were yesterday framing a fierce response to the news that the English contingent had unilaterally sold broadcasting rights to their cross-border matches from 2014 – a flexing of financial muscle if ever there was one. On the other, the talk in the corridors of Premiership power was of an unexpectedly lucrative deal that will lead domestic league rugby into a more secure financial future, in the short term at least.

According to Mark McCafferty, the chief executive of Premier Rugby, the top-flight clubs can expect a 50 per cent jump in the money they receive from the broadcasting pot. This could yield the best part of £3m a season to the most established Premiership teams – almost three-quarters of the amount they are currently permitted to spend on players.

"It's a game-changing agreement," McCafferty said after concluding an intense round of highly secretive negotiations with the new broadcasters. "BT is a company at the cutting edge of technology and we will develop a broad partnership."

That partnership centres on the live broadcast of between 52 and 69 Premiership matches a season over four years, with comprehensive coverage of the English clubs' summer seven-a-side tournament thrown in. With BSkyB and ESPN out of the domestic game, BT will have the field all to itself – although Premier Rugby hopes to extend its current terrestrial highlights deal with ITV.

There is, however, a "but" here – and it is a very big "but", to be sure. By including rights to European matches involving English clubs in the BT deal, Premier Rugby is indulging in political brinkmanship of the most perilous kind. The immediate reaction of ERC was to ask how the English could sell something that was not theirs to sell. While McCafferty was extolling the virtues of a deal that would increase the money in the pan-European pot to the benefit of all those who participate – the French clubs, the Irish provinces, the Welsh regions, the Italian franchises and the big-city Scottish teams – the people running the European tournaments were pointing in the direction of International Rugby Board regulations and explaining just how far outside those regulations the English were putting themselves.

Cranking up the pressure, ERC announced a new exclusive TV deal of its own – a four-year contractual extension with none other than BSkyB, the long-established broadcasters driven out of the Premiership by the brash new kids on the sports-rights block, BT. What is more, insiders pointed out that this had been unanimously sanctioned, as far back as early June, by the full ERC board, on which Premier Rugby is represented through Peter Wheeler of Leicester.

McCafferty was insistent yesterday that Premier Rugby had been perfectly entitled to sell the rights to European matches involving English clubs, and that by doing so the financial fortunes of the Heineken Cup would be considerably enhanced – not just for the Premiership contenders, but for everyone. Significantly, he also said he was confident that if no agreement on changes to the tournament's format and commercial approach was reached, and the English made good on their threat to walk away from the tournament at the end of the 2014 campaign, another cross-border tournament would be put in place in time for the new season.

As the elite French clubs have also served notice of their intention to quit the Heineken Cup in two years' time if no satisfactory agreement is reached, it is widely assumed that a cross-Channel competition would be launched. The prospect of this would almost certainly interest the Welsh regions, who have been lost in a financial dark alley for some time.

But ERC officials are far from convinced that the French are truly serious about severing links with the existing tournaments and, anyway, French law is much more intrusive than Britain's when it comes to sporting freedoms. There would be complications galore.

If Premier Rugby sticks to its guns on the broadcasting front and forces a crisis, both the IRB, the governing body of the world game, and the various national governing bodies will have no choice but to get involved. Reluctantly, in the case of Twickenham. Relations between the Rugby Football Union and its leading professional clubs have stabilised a great deal since the English boycott of the 1999 Heineken Cup; indeed, they have never been better. But if there is precious little appetite on either side for a battle over broadcasting and participation rights, there may be no avoiding it.

Last night, McCafferty was bullish about his prospects. "We anticipate that this is the beginning of an excellent partnership with BT," he said. "It's an outstanding deal to support the continued development of Premiership rugby and in addition, the value of the European element from our clubs' rights will serve to help the European game in its future competitions. We are committed to finding an agreement including competitions that not only involve teams from the existing countries but also sides from the emerging rugby markets. It is important that the game continues to expand and grow. We have made proposals and we look forward to progressing discussions."

Those talks, starting in Dublin next week, will be fraught. "We remain determined to honour our own commercial commitments and to continue our work to further develop the European club game," said an ERC spokesman. Both sides have pledged to play until the final whistle on this issue, but only one can win.

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