BSkyB saw more than £1.5 billion wiped off its stock market value after the pay-TV group lost its Champions League soccer rights in Britain.

Shares in the group, which had previously seen off three major challengers to its dominance of the home movies and sports market, tumbled more than 10% after it suffered its first major rights auction loss to once-staid telecoms company BT.

The 168-year-old former state telecoms group agreed to pay £900 million, or more than double the previous contract with BSkyB and ITV, to add the European ties to the English Premier League matches it already shows.

For BSkyB, the loss raises the likelihood it will have to pay more for future content deals, including the next Premier League auction which is expected to be held in 2015 for the three seasons from 2016.

It also leaves BSkyB suddenly looking vulnerable in a market it helped to build.

BT, which has spent years slashing costs and cutting staff after two profit warnings in 2008 and 2009, stunned the sporting world last year when it won the rights to show 38 live Premier League matches a season.

While the new entrant to the market remained a minnow in comparison to BSkyB and its 116 games, the move was an early indication of how BT was willing to spend big to protect its core broadband and fibre services by combining it with an offer of high-quality sports programming.

The move mirrored that of Murdoch's Sky, which built up its business to broadcast in more than 10 million homes by outbidding rivals such as ITV and the BBC for the best sports and movies.

Sky will keep hold of the rights to Formula 1, golf and the most important cricket competitions, including the Ashes, and is likely to increase its investment in original British drama and US programming such as Dexter and Boardwalk Empire.

The group, which has posted a near 130% rise in earnings per share in the last four years, said Champions League soccer only made up 3% of its total viewing on Sky Sports and said it would rather invest in a different range of programming than overpay for soccer.

"We are no longer the Sky of 20 years ago," a source at the company said.

A more than 10% fall in BSkyB's share price puts the group on course for its biggest one-day fall in almost five years.

With annual revenue of more than £18 billion and a market value of £29 billion, BT is also in a completely different league to the three previous groups that had tried to challenge BSkyB - ITV Digital, Setanta and ESPN.

Analysts downgraded their forecasts for BSkyB, fearing a hike in content costs and a slowdown in the rate of broadband subscribers Sky could sign up.

By offering its sports channels for free as part of a broadband package, BT was targeting those Sky TV customers who had been switching their broadband service to Sky in droves.

Irish broadcast rights for Champions League and Europa League matches are separate to those secured by BT and will be decided at a later date.