Sky's high price for football rights puts squeeze on channel providers
The imminent leap in the cost of Premier League football rights is putting pressure on Sky’s pay-TV channels, as it seeks to slash its bills from Discovery and other suppliers. It is understood that Sky has entered tricky negotiations with the US media giant over the cost of carrying its channels, which include the female-focused brand TLC and nature documentary specialist Animal Planet, as well as the flagship Discovery Channel.

Sky is using its clout to demand lower prices, which industry sources said has in turn prompted Discovery to increase its rates for smaller rivals.

The squeeze has already prompted TalkTalk, which has 1.4m TV customers compared with Sky’s more than 12m, to drop Discovery’s channels from the end of this month.

BT is also understood to be facing calls from Discovery to pay more for the bundle. The developments signal a shift in priorities at Sky.

From next season, its Premier League bill will rise 83pc to £1.4bn annually. The company is also diverting money from third-party pay-TV channels to original commissioning and exclusive long-term supplier deals that it believes help prevent subscribers defecting to lower-cost rivals, such as its partnership with HBO for programmes on the flagship Sky Atlantic channel.

The shift of value away from traditional pay-TV channel suppliers has long been expected in the industry. Discovery itself has piled investment into exclusive sports rights including the Olympics and a breakthrough live Bundesliga football deal last week in Germany.

A Discovery spokesman said: "We don’t comment on private contractual agreements. Discovery is a premium content provider with long-standing relationships with distributors who have a long-term commitment to the premium video business.” Sky declined to comment.