Sky mulls deal to let Freeview air Premiership matches

BSkyB, the broadcaster, is exploring ways to make its live Premiership football coverage available in homes that take the Freeview digital terrestrial service.

The company would charge a monthly subscription for watching the matches, industry sources said, but the move would represent a major departure from its existing strategy, which has involved selling live Premier League matches as part of a package of channels either on cable or through its own satellite platform.

If Sky does a deal with Freeview, it would, in effect, enable subscribers for the first time to access its premium sports channels without also having to pay for a basic package of channels.

Sky already has three channels on Freeview, which is available in more than 7 million homes, but all of these are free to the viewer.

Sky is reacting to its broadcasting rival Setanta, which has already stated that it wants its matches available in Freeview homes - again on a subscription basis. Setanta, an Irish pay-TV company, shocked the industry by winning the rights to show a third of the games in an auction held by the Premier League last month, breaking Sky's monopoly hold on football.

There is also regulatory pressure on Sky to make its content available across all platforms - cable, satellite and Freeview. The Premiership rights entitle Sky to screen matches on any platform, including digital terrestrial.

Sky is believed to have started talks with Top-Up TV, the only pay-television service currently available to digital terrestrial viewers, about putting Sky Sports channels on Top-Up. Setanta was already in negotiation with Top-Up over a plan to offer one sports channel to digital terrestrial homes.

One industry source said: "Sky is very keen to exploit the [Premiership] rights on digital terrestrial television. It will not allow Setanta to establish itself as the home of live football on DTT ... It is just too dangerous for Sky to let Setanta become the only premium sports provider on DTT."

Setanta won the rights to screen 46 games a season for three years starting from 2007, while Sky picked up 92 games a season. The broadcasters paid a combined £1.7bn for the rights. Top-Up declined to comment.

A spokesman for Sky said: "The new contracts start in August 2007, and all 92 matches will be broadcast on Sky Sports."

Sky's football content is reckoned to have been its biggest driver of subscriptions since the company won the rights to show live Premiership action in 1993. The company has signed up more than 8 million homes, of which more than 5 million are thought to be paying for live football.

To get Sky's live channels, Sky Sports 1, 2, 3 and Extra, its customers have to pay a minimum of £34 a month for a package that includes other pay channels. To receive all of Sky's live sports coverage as a Telewest customer, it costs a minimum of £27.50 a month, including the cost of Telewest's basic TV package, and £28 a month on NTL.

Setanta's offering on digital terrestrial is likely to cost around the same as the £14 a month it currently charges for its existing sports channels, which are available on Sky and cable.

Analysts believe Sky would want to put a substantial sports package on digital terrestrial so the service could be priced at a level that would not undercut the existing offering on satellite.

Digital terrestrial requires consumers to buy a set-top box. It is known primarily as a free-to-air service, called Freeview, with most households that take it watching the 30 channels that do not need a subscription, including the likes of ITV3 and ABC1.

However, if households buy a more sophisticated set-top box, which allows encryption, pay-TV channels become available. Top-Up TV uses this facility to offer a bundle of 11 channels, such as Discovery and UKTV Gold, to digital terrestrial households that pay £7.99 a month.

Top-Up has announced that it will evolve into a download service, freeing up its capacity for broadcasting other channels.