Sky climbdown lets rivals screen next season's Premier League

Sky Sports to launch on digital terrestrial channels after Ofcom agrees new rates

Football fans hoping to watch live Premier League matches on television will have a much wider choice of channels from next season after a compromise deal was agreed yesterday between British Sky Broadcasting (BSkyB), three of its rivals and the broadcasting regulator Ofcom.

The agreement will see BSkyB provide its Sky Sports 1 and 2 football coverage to BT Group, Virgin and Top Up TV from next season, while continuing to contest an Ofcom ruling about the prices it should charge its rivals.

BSkyB had hoped the Competition Appeal Tribunal (CAT), which has been studying the case in recent days, would give it a stay of execution on implementing the Ofcom decision while it challenged the regulator in the courts.

Instead, the company said it had agreed a deal for BT Vision, the telecoms group's pay-TV service, and Top Up to screen its content to their viewers from next season. In addition, Virgin will continue to offer Sky Sports.

In return, BSkyB won several concessions from Ofcom. Only the three companies specified can take part in the deal, and they will have to pay for content at current rate card prices until the legal appeal is concluded.

The difference between that price and the maximum Ofcom proposes to let BSkyB's charge will be held in an escrow account. Should BSkyB's appeal succeed, it will receive this cash; if not, the money will go back to BT, Virgin and Top Up.

BSkyB said the deal was a "sensible middle ground", adding: "It gives us some significant concessions compared to Ofcom's original decision."

It said it would continue to prepare its appeal, which must be lodged before June. The process is expected to last between nine and 12 months. It wants to quash the Ofcom ruling that it should slash the wholesale price of its premium sports rate card by between 10 and 23 per cent.

BSkyB added that it was glad it would not have to wholesale its content "indiscriminately", which blocks potential moves into internet television by providers such as the mobile phone operator Orange, which gave evidence at this week's CAT hearings.

Ofcom said the agreement was good news for viewers, adding: "We look forward to the next steps in the process, including the formal appeal, where we will defend the decisions we have taken, which are in the interests of UK consumers."

BT said: "We are delighted Ofcom's decision can be implemented pending the full appeal, and that we will be able to bring Sky Sports 1 and 2 to customers in time for the 2010-11 Premier League football season this summer." Virgin Media also welcomed the decision, saying: "We look forward to Sky issuing its reference offer so that the wholesale regime can be implemented as quickly as possible."

Top Up TV's chief executive, Nick Markham, said the company was happy "as the agreement removes a legal hurdle. In the meantime, we can get on with life and launching the service".

The deal came as BSkyB said it had continued to reap the benefits of its drive into high-definition programmes, attracting 62,000 new subscribers between January and March to bring its total close to 10 million.

The pay-TV group, run by Jeremy Darroch, said it would begin showing rugby in 3D in pubs, in addition to football, but was waiting until demand grew before offering the service to subscribers at home. It plans to screen the Guinness Premiership Final and England's match against the Barbarians in 3D.

Sky was first to broadcast a live UK sports event in 3D – a match between Manchester United and Arsenal – earlier this year. Mr Darroch said: "The launch of Sky 3D, Europe's first 3D-TV channel, has got off to a good start, with more than 1,000 venues signed up so far."

The addition of new customers saw 9.77 million households signed up to Sky in the third quarter. The group's revenues rose 11 per cent to £4.3bn, with profits up 5 per cent at £618m.