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Sky and BT Watch as Ofcom Investigate Premier League TV Football Rights

Tuesday, November 18th, 2014 (9:43 am) - Score 880

A complaint by Virgin Media has prompted the United Kingdom’s telecoms and media regulator, Ofcom, to launch an investigation into how the Premier League sells its live TV and related rights for football matches, which is a market that’s currently dominated by BT (BTSport) and BSkyB (Sky Sports / Sky Broadband).

The situation first became known over a month ago after Virgin Media moved from its previously neutral stance on the subject and lodged a formal complaint with Ofcom, which it hopes will be used to help stop the costs of related content from getting out of control (here).

Several years ago it was Sky Sports that dominated almost all of the primary premium TV sport channels and related content, although this started to change after BT (BTSport) entered the market by aggressively out-bidding BSkyB for some of the rights and then offering their content for free alongside broadband and phone bundles.

Meanwhile Virgin Media has been left stuck in the middle, which meant that in order to deliver full coverage they needed to agree special TV rights deals with both BT and Sky (i.e. the costs of related content have sharply increased). The cable operators position is that the “significant consumer harm” resulting from escalating rights costs can be addressed by targeted changes to the way in which live rights are sold.

At the same time the Premier League themselves have been 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.”

Never the less Ofcom appears to have decided that there are enough grounds to warrant a further investigation under the Competition Act 1998, although the regulator has stressed that their investigation is still “at an early stage” and so far they haven’t “reached a view as to whether there is sufficient evidence of an infringement of competition law for it to issue a statement of objections.”

Ofcoms Summary of Virgin Media’s Complaint

The investigation follows a complaint from Virgin Media, which was submitted to Ofcom in September. Virgin Media’s complaint alleges that the arrangements for the ‘collective’ selling of live UK television rights by the PL for matches played by its member clubs is in breach of competition law. Under the PL membership rules, which are an agreement between each of the Premier League clubs and the PL, the PL has authority to enter into contracts for the sale of rights to Premier League matches.

In particular, the complaint raises concerns about the number of Premier League matches for which live broadcasting rights are made available.

Virgin Media argues that the proportion of matches made available for live television broadcast under the current Premier League rights deals – at 41% – is lower than some other leading European leagues, where more matches are available for live television broadcast.

The complaint alleges that this contributes to higher prices for consumers of pay TV packages that include premium sport channels and for the pay TV retailers of premium sports channels.

Ofcom also said they were “mindful” that another round of auctions for the related audio-visual media rights was imminent and said they were “open to discussion with the Premier League about its plans“, although it remains to be seen whether there will be any delays or changes to this process.

In the meantime Ofcom intends to start by gathering as much information as possible from all of the interested parties, which will also consider the scheduling of football games (e.g. many football fans attend 3pm kick-offs on Saturdays).

As usual 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 thus pushing the prices up for consumers on other providers.

Leave a Comment
6 Responses
  1. Avatar dave says:

    I wish sky didn’t get into the broadband and phone business as we would just have sky sports for premier league rights which would mean cheaper prices and it would also mean that BT wouldn’t have hiked up their prices of landline and internet to pay for the sport.

    1. BT had no need to hike up their prices to pay for “free” BT Sport – the Government gave them all the money they needed via BDUK and the County Councils.

    2. Avatar FibreFred says:

      The Government money went to Openreach, Openreach don’t own any football rights they just own and run the infrastructure.

    3. Avatar No Clue says:

      Who in turn get a nice slice of whatever the customer pays BT Retail to get hooked up to BT Sport which is delivered over that infrastructure openreach provide.

    4. Avatar Raindrops says:

      Oh god do not confuse him with distribution of money and resources.

    5. Avatar No Clue says:

      It takes far less than things like that to confuse him 😉

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