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November 15, 2013 6:39 pm

Gavin Patterson: Betting big against Murdoch

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The BT boss’s swoop on football rights threatens Sky’s hold over UK sports TV
Gavin Patterson

The BT team given the task of winning television rights for some English Premier League football matches were determined to spring a surprise on rivals thrown off the scent by rumours (untrue) of interest from Al Jazeera. Secret war meetings were held around kitchen tables far from the British telecoms group’s City of London HQ.

The ruse worked. In a coup masterminded by Gavin Patterson, BT’s new chief executive, in his former role as head of its consumer business, the company shocked the market in June last year with a £738m swoop to revive its faltering television platform. The move wrongfooted BSkyB, Rupert Murdoch’s British TV behemoth, whose dominance of sports TV is being challenged by Mr Patterson’s vision of a BT unshackled from its staid past as a state monopoly.

There was no such subterfuge last week, however, when BT doubled down on its bid to topple Sky by stealing the crown jewels of the football calendar. The company let its wallet do the talking, tabling £900m for European Champions League football. Shares, which dipped initially, quickly regained value as investors accepted the unexpectedly aggressive move. Sky executives say this was far beyond what they were willing to spend.

Mr Patterson now needs to make the expensive bet pay off. With his open collars and his swept-back black hair, the 46-year-old Liverpudlian has always stood out among BT’s ranks of engineers. The colourful silk shirts and chunky watch, with which he toys restlessly at meetings, has led more than one person to describe him as “flash”.

The suave former Procter & Gamble marketing chief could not be more different from his predecessor Ian Livingston, a combative Glaswegian. “Ian used to say that one button undone was fine, two was a bit racy, and three was Gavin,” said one former BT staffer.

But those who know Mr Patterson well say his approach is suited to betting big with cash won by five years of cuts under Mr Livingston. “[Former chief executive] Ben Verwaayen was about big ideas and cheerleading; Ian was a spectacular details man. Gavin brings in the consumer focus,” says one person who knows Mr Patterson. “He will take some risks to make this work.”

Mr Patterson was part of a group of executives handpicked in the early 2000s and “pushed up the ladder”, according to one BT observer. “BT has had a hugely risk-averse culture. He is prepared to think about BT in a different way.” He will add sparkle to the company’s fledgling media business, according to a former employee, who notes the increase in “long-haired casuals” at BT Centre.

Yet according to one colleague, his “debonair personality” can prove deceptive. “Some people question whether he is just a marketer and not a serious businessman. But Gavin has been the trailblazer for cost cutting at BT. He has got steel in him to do the hard jobs.”

Mr Patterson brings an openness to ideas and a sense of humour in meetings, say employees, offering jokes to defuse stress. His relaxed style became instantly apparent with a popular decision to move the Monday operational committee meetings from the early morning slot set by Mr Livingston to a later time.

Buying football rights is as much pleasure as work for Mr Patterson. He has been an Liverpool fan since his time at the state school he attended in nearby Warrington, where he was raised by his engineer father and teacher mother, before reading engineering at Cambridge university. He has four children with his American wife, who nearly persuaded him to move to the US, where she worked for fashion designer Donna Karan.

His own school run has become more interesting recently. His children attend the same school in the wealthy county of Surrey, in southeast England, as those of Jeremy Darroch, Sky chief executive. The arch-rivals, who worked together at P&G, are said to be on good terms personally, even as the fight between their businesses for TV and broadband customers intensifies.

Mr Patterson often uses BT’s box at London’s O2 arena to watch concerts, including the Rolling Stones and Radiohead this year. People who know him say there is more than a little of the “rock and roller” to him.

With his shampoo-selling days long past, jokes about his time working on Pantene hair products at P&G wear thin for the well-groomed Mr Patterson. He joined the telecoms sector in 2000 at cable group Telewest, where he began the fight with Sky as managing director of TV services. He continued the battle when he became managing director of BT’s consumer division in 2004. His launch of the Vision TV service was deemed a failure by analysts, falling short of a target of 3m customers by 2010. BT’s pay-TV subscribers have still not topped 1m, even if more than 2m of its customer base have signed up to watch the sports channels for free. It is only now that the platform has won the investment needed to compete in the pay-TV market, former BT staffers say, where expensive content is the key to winning viewers.

BT executives point out that Mr Patterson is not limited to TV. He led the launch of Infinity fibre broadband, which remains central to the company’s strategy of selling higher-priced packages of broadband and landline products using TV content as the carrot. His team has built the UK’s largest WiFi network.

But it is his bet on TV that will define his tenure. To some, it looks like an expensive mistake, a “case of more money than sense”, according to Claire Enders, the media pundit. Other analysts have cautiously welcomed the content strategy, since BT already owns the means to get into homes. Challengers have tried and failed to dent Mr Murdoch’s hold on pay-TV, but BT has shown its willingness to outspend Sky.

However, Mr Patterson must wait 18 months before he can screen the Champions League – a long time in a fast-moving media world, where his schoolgate rival will no doubt be plotting Sky’s comeback.

The writer is the FT’s telecoms correspondent

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