Boost for Sky as Monti clears football rights

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The Independent Online

Premier league football clubs will be allowed to continue selling their TV broadcast rights collectively under a compromise deal being drawn up by the European Commission, The Independent has learned.

That would provide a huge boost to BSkyB, the pay-TV group, which has seen its exclusive live coverage of Premiership games come under threat from the investigation into the way the rights were bundled together by the football authorities. That enabled Sky, which had the deepest pockets, to snap up the football coverage, with ITV and the BBC losing out.

City analysts have expressed concern that if the Commission insisted that football rights are broken up into several packages, Sky would probably lose its exclusivity and a major driver of subscriptions. The football authorities and the smaller clubs also feared that breaking up the rights would mean that the overall sum raised from a deal to air games would fall, as no company would be paying a premium for exclusivity.

Brussels launched an investigation into the deals last year, claiming that the way the Premier League negotiates exclusive contracts with TV companies for the broadcast of live matches and highlights was "restrictive and unfair".

But Mario Monti, the European Competition Commissioner, has now given a clear hint that he will not break up the joint-selling arrangement. "A competition and consumer-friendly approach wouldn't necessarily put club solidarity at risk," Mr Monti has reassured senior colleagues. Under the current system the league negotiates on behalf of all its 20 clubs with BSkyB for live games and ITV for highlights. Money from the £1.6bn contract is put into a central pot and divided out among the clubs.

In return for the concession to continue joint selling, it is understood that more live games will have to be made available to other broadcasters.

Uefa was forced to open up its own rights to the Champions League after a similar Commission complaint about anti-competitive behaviour. European football's governing body agreed to the demands for the 2003-04 season in return for an exemption from tough rules which could have seen it fined up to 10 per cent of its annual turnover.

Patricia Hewitt, the Trade and Industry Secretary, phoned Mr Monti on Thursday to underline the Government's own concerns about the need to protect Premier League club income. Although Ms Hewitt said she had no wish to interfere in the investigation, she stressed the benefits of redistribution of TV profits among all clubs and the trickling down of money to the grassroots it allowed.

Joint selling was "good for the game" precisely because it helped smaller clubs that would be squeezed out by individual deals by Manchester United, Arsenal and Liverpool, she said.

Top City banks had warned that Premiership clubs would be starved of cash if sweeping changes were introduced.