Premier League TV rights: Sky bets billions that we haven't reached 'peak football'

BT vs Sky. Both teams carrying around financial niggles. I had this down as a bore draw.

I was wrong. This outcome of this auction has incinerated all forecasts, including the most outlandish.

Sky has built an incredibly successful business on the back of its status as the "home of live football" - from 2016 it will retain the lion's share of matches but, my goodness, it has paid handsomely for them.

The balance of football rights is more or less unchanged (Sky gets 126 games a season against BT's 42) but competition between the two rivals has forced the value of those rights to new and staggering heights.

A mind-boggling £5.1 billion for three seasons. That's £1 billion more than the City expected.

BT will pay £960m (a modest increase on the current outlay of £738m). Sky will pay £4.2 billion, almost double the £2.3 billion it paid last time.

That number sounds absurd but Sky thinks it stacks up, and future profit forecasts are unchanged. Watch the share price tomorrow morning.

Investors were worried that in the heat of the auction someone would lose their head. There is a limit to the amount of money people will pay to watch live football.

Sky is betting an eye-popping sum of money that we haven't yet reached "peak football". Some will shake their head, but Sky's judgement in the past has been spot on.

Tom Mockridge, Virgin Media's chief executive says the outcome of this auction will "hurt fans". He's right in the sense that some costs will be passed on to viewers (although note Sky is promising savings).

Mockridge sees today as proof that "the TV rights auction is a licence for the Premier League to print money". That's demonstrably been the case to-date, although there may be a hint of sour grapes too. Football has now become such a valuable commodity that few companies - his included - have pockets deep enough to bid for them.

Sky is limbering up to spend £1.4 billion on live football a year from 2016. That's considerably more than the £1 billion ITV spends on entertainment, drama, soaps, sports, documentaries and news (national and regional) across its family of channels.

The rights to live Premier League matches were first sold 23 years ago when Sky outbid ITV. For better and for worse, television money has transformed football. The game is already awash with it and more is on its way.

On past experience, some will trickle down to the game at grassroots level, some will be spent on improving stadiums, most will end up in the pockets of players.

The Premier League's chief executive Richard Scudamore said that even he was surprised by the size of the bids from Sky and BT but pointed out that the Premier League is the most successful football league in the world.

As he put it, "Burnley are now bigger economically than Ajax". It's a funny old game.