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UPD Virgin Media Stokes Feud with BT and Sky Over Premier League TV Costs

Wednesday, October 1st, 2014 (8:50 am) - Score 804

Cable operator Virgin Media has moved from its previously somewhat neutral stance, specifically in the conflict between BSkyB (Sky Broadband) and BT over Premier League TV rights, by lodging an official complaint with Ofcom and pleading for the comms regulator to help stop the costs of related content from getting out of control.

Last year’s launch by BT of FREE TV sport content (BTSport) with their broadband and phone packages, which among other things included exclusive live coverage of many Barclays Premier League football matches, ultimately changed the market and broke BSkyB’s (Sky Broadband) dominance of football and other sporting TV rights.

But the move left Virgin Media stuck in the middle of a difficult battle, which meant that in order to deliver full coverage they needed to agree special TV rights deals with both BT and Sky. Naturally the costs increased and now VM are concerned that the next battle over rights could result in a massive price hike for their customers, which they fear could leave them at a disadvantage.

As a result it’s perhaps little surprise that Virgin Media has called on the communications regulator to investigate.

Brigitte Trafford, Virgin Media’s Corporate Affairs Boss, said:

The rapidly rising cost of Premier League live broadcast rights means UK fans pay the highest prices in Europe to watch football on TV.”

Ofcoms Statement

Ofcom can confirm that Virgin Media has submitted a competition complaint about the Premier League. We are considering the complaint, before deciding whether any further action is required.”

Modern football is all about exclusivity and money, much more so than it ever was in the past. Fans only need to take a brief look at the pay-packets of the top players (not to mention many underperforming players!) to see how the trend is rising. It’s become somewhat of a vicious cycle and one that sees clubs happy to get more money in order to keep the trend going and to stay competitive within the UK and Europe.

Unfortunately much of this has been fuelled by the big commercial battles over TV rights, although the Premier League themselves were keen to stress that, “Regulators have examined our rights packaging and sales process in considerable detail in the past and found both of them to be compliant with UK and European competition law.”

Virgin’s official complaint was lodged during the middle of September 2014 and Ofcom are hoping to make a decision on whether or not to conduct a full investigation by the end of November 2014. The difficulty will be with striking the right balance in an area of such aggressive but natural competition, where one side is clearly willing to best the other by significantly out-bidding them and then offering the same content for “free“.

UPDATE 9:31am

Virgin Media has kindly provided us with a little more background. Apparently they has asked Ofcom to open a formal investigation under the Competition Act 1998 into the arrangements by which the FA Premier League sells live UK television rights to its games. Virgin Media considers that “significant consumer harm” resulting from escalating rights costs can be addressed by targeted changes to the way in which live rights are sold, while preserving the benefits of joint selling. A review is required with the next auction imminent and, they claim, a further 60% inflation in costs predicted.

The provider notes that the European Commission, in 2006, found that the collective selling of Premier League television rights infringed Article 101(1) Treaty on the Functioning of the European Union. The FAPL’s auction process was only permitted (under Article 101(3)) following binding commitments given by the Premier League that were intended to: (i) promote competition between broadcasters and at the retail level; and (ii) increase the number of games made available for live broadcast on TV.

These commitments expired in June 2013 and, Virgin claims, have not achieved the required objectives. As a result Ofcom may be able to intervene on the basis of Chapter I of the UK’s 1998 Competition Act and Article 101 of the EC Treaty. Virgin Media now believes that UK viewers pay the highest prices in Europe to watch all available Premier League live matches and apparently the average price is three times higher than for other top leagues.

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By Mark Jackson
Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he also founded ISPreview in 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on Twitter, , Facebook and Linkedin.
Leave a Comment
12 Responses
  1. “one side is clearly willing to best the other by significantly out-bidding them and then offering the same content for “free“”

    There is a phrase for this, which Ofcom seem to have forgotten – it is called dominance abuse!

    What is even more annoying is that BT is using the money it is getting via the BDUK farce to pay for those football rights – no wonder it is happy to give them away for free to its own broadband customers.

    Things might be a bit better if Ofcom did not take the ASA as its benchmark for effectiveness! 🙂

  2. adslmax says:

    A warning to Ofcom – to tell BT off to stop charging million of customers of line rental charge increasing because of Free BT Sports. It so unfair for peoples who don’t have Sky, Virgin or BT Sports on TV.

    Biggest conned and ripped off in our country.

    1. FibreFred says:

      Proof this is actually happening

      Otherwise………….. just general BT hating BS

  3. FTTH says:

    End of November to review… That sounds a little too late.
    Didn’t the Premier league want the bidding to start in December this year?

    This ‘closed bid’ is going to be nuts, there will be no winners other than the premier league. SKY can’t afford to loose it, BT can’t be seen to loose face.

    Crazy.

  4. DTMark says:

    “Virgin Media now believes that UK viewers pay the highest prices in Europe to watch all available Premier League live matches and apparently the average price is three times higher than for other top leagues.”

    should read as

    “Virgin Media now believes that UK viewers *voluntarily choose to* pay the highest prices in Europe to watch all available Premier League live matches and apparently the average price is three times higher than for other top leagues.”

    What’s the problem? If you don’t like the prices, don’t buy. What is it about this industry that causes providers to go running to their metaphorical mother saying it’s not fair?

    If Virgin Media were to discontinue BT Sport, for instance, who would be damaged more after paying out for all those rights – BT, or Virgin?

  5. Gareth says:

    I think it’s an absolute disgrace that BT is allowed to bid billions for a vanity project that WILL add money to the standard line rental for millions of people who do not even have BT Sports.

    My grandparents who are both in their 80’s and need the BT line pay nearly £70 per quarter now and only around £5 of that is for calls.

    1. DTMark says:

      If Virgin Media chose not to continue to supply BT Sport, would that give them a potential price advantage e.g. they don’t need to socialise that cost any more, and so can offer a differential – that being lower prices?

    2. Ignitionnet says:

      Virgin don’t supply BT Sport to everyone. It only comes with their highest TV package.

  6. No Clue says:

    BT Sports content is in general a load of rubbish anyway. As for the premiership they only have 38 matches total and only 18 of those are not live on Sky. Or from the 9 month long season that when you average it is a massive 2 games per month LMAO

    Virgin would probably be better off dropping it and so would anyone paying £12 or thereabouts a month for 2 football matches.

    mind you the “…changed the market and broke BSkyB’s (Sky Broadband) dominance of football and other sporting TV rights.” did make me laugh, yes i spose it did if you do not include Sky launching sky sports 5 this year and once again gaining the F1 rights. The only thing BT Sport has done in the main is broadcast a bunch of Z-listers talking about sport and showing rubbish nobody is interested in like motogp.

    What ever happened to the idle promises dating all the way back to the beggining of the year from BT about taking on Sky to win cricket and golf rights?…. More hot air from them as always.

    Im sure one of their shareholding worker bees will be along shortly though to tell all of us not to bash BT and in general repeat their boredom about how great a company they are.

    1. Rusty says:

      Just curious, as someone with such a huge opinion on BT, do you have broadband and subscribe to BT Sport? P.s I’m certainly not a subscriber, shareholder or in a position to influence in my company as to which third part I use to provide broadband,.I just accept that, as a country, we are dealing with a supplier who may not be ‘up to scratch’ when compared to other countries who have had the benefit of watching what not to do. Something a colleague said to me once always sticks in my mind – if you want to see a good example of a mass transit system, look at Singapore. If you want to see a historical mass transit system where everyone makes the best of a situation that isn’t ideal, look at Transport for London.

    2. No Clue says:

      “do you have broadband and subscribe to BT Sport”

      No and No. Oh and to the first part of the question i post here with the power of tin cans and string obviously.

  7. FTTH says:

    BT Sport needs SKY and Virgin.

    Without a decent delivery method BT’s need to rely on IP delivery. As some of the bigger Sport events now are investing in 4k, this might be an issue as not many subscribers can get the Broadband speeds needed.

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