BSkyB suffered a rare defeat in a sports rights battle last week, losing out to News International – owned by the pay-TV broadcaster's controlling shareholder News Corporation – in the battle for the exclusive rights to internet and mobile highlights for Premier League matches.
Moreover, News International's winning bid was led by a former senior Sky man – Mike Darcey, who after six years as chief operating officer joined the newspaper publisher as chief executive at the start of the month.
Darcey is a veteran of as many as five Premier League TV auctions, including last year's successful but eye-watering £2.3bn Sky bid tabled in the face of a challenge from BT.
The satellite broadcaster was one of at least four companies, which are understood to have included existing rights holder Yahoo, mobile operator O2 and Leonard Blavatnik's Perform Group, to have submitted sealed bids in the Premier League's digital rights auction held last week.
Sky has been aggressively developing a mobile content strategy, launching Sky Go and Sky Now services in the last year, and was understood to be keen on the digital rights, but nevertheless failed to top the offer submitted to the Premier League by News International.
News International's bid is thought to be worth about £30m over three years to use Premier League clips on the websites and apps for the Sun, Times and Sunday Times.
This is close to double the £17m the last three year deal is thought to have been worth, according to sources.
Under the previous deal the rights were split between Yahoo, which had internet clips, and mobile, which was controlled by ESPN. The split of the £17m total value of the deal is not known.
"We were informed that the Premier League has not accepted Yahoo's bid for the award of the Near Live Clips Package for the 2013-2016 seasons," said a spokesman for Yahoo. "However, mobile, video and sports will continue to be a focus of ours as we continue to inspire and entertain our millions of UK users in their daily habits."
ESPN, which was shut out of the Premier League live TV rights deal following a £738m bid by newcomer BT, is not thought to have submitted a bid for the digital rights.
"We're very proud of the success that we have had with ESPN Goals mobile app this season and the past two seasons," said a spokesman for ESPN, who declined to comment on whether the company bid. "Fans can enjoy ESPN Goals for the rest of this season and though we will not continue with these rights, we will continue our extensive online and mobile coverage of the Premier League and the wide array of UK football across our digital platforms."
It is thought that BT did not submit a bid, although this has not been confirmed. BSkyB, O2 and Perform declined to comment.
Under the current deal for internet video rights Yahoo has syndicated highlights to third parties including the Daily Mail, Guardian, Sun, Times, Daily Telegraph, London Evening Standard and Independent.
News International has said that it has no intention at this stage of offering the clips to third parties.
The Premier League combined the internet and mobile rights for the latest deal, the first time it has done so.
Mobile is regarded as having the most revenue potential. This is due to factors including the huge growth of smartphone and tablet sales, which has fuelled the rise of paid app usage. The mobile rights package also gives News International the opportunity to offer up to eight 30-second highlights clips during all live Premier League matches.
The internet highlights offer longer clips, but cannot be shown online until the Monday after matches have aired, making them less valuable.
In 2007 BSkyB and News International launched 24-7 Football, an on-demand football clips service for mobile users. For £5 a month, or 50p per video clip, users bought access to goal highlights.
This summer News International will become part of Rupert Murdoch's new demerged publishing venture, which will retain the name News Corporation and run by former Times editor Robert Thomson.
It is understood that Thomson is keen to assess the strategic merits of buying other valuable digital rights, most likely outside the UK, that can help drive the publishing operation's strategic shift to digital.
Late last year News Corp made a filing to the Securities & Exchange Commission in the US which showed that if the publishing company was split off it would have had $1.1bn (£699m) in cash on its balance sheet at 30 June last year.
It is understood that the new publishing venture could have as much as $3bn in cash, depending on the final details of the demerger from News Corp's Fox TV and film businesses, when it is split off this summer.
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