Sky to fights sports channels price ruling

Sky said today it would take legal action against Ofcom after the media watchdog ruled it must offer its premium sports channels to rival broadcasters at a lower price.

Consumer groups said the broadcasting regulator's decision would mean more choice and lower prices for viewers, but sporting bodies reacted furiously to the potential cut in funding and threatened legal action of their own.



Ofcom's announcement that Sky must offer its Sky Sports 1 and 2 channels to other broadcasters at a wholesale price set by the regulator follows a three-year investigation into the industry after concerns were raised by BT, Virgin Media, TopUp TV and Setanta, which has since gone bust.



The regulator said: "Ofcom has concluded that Sky has market power in the wholesale provision of premium channels. Ofcom has also concluded that Sky exploits this market power by restricting the distribution of its premium channels to rival pay-TV providers. This prevents fair and effective competition, reduces consumer choice and holds back innovation and investment by Sky's rivals.



"Today's decisions are therefore designed to ensure fair and effective competition which should lead to greater investment, innovation and choice for consumers."



BSkyB immediately said it would challenge Ofcom's conclusions before the Competition Appeal Tribunal, describing the ruling as an "unprecedented and unwarranted intervention".



A spokesman said: "This is a marketplace where customers are well served with high levels of choice and innovation. Consumers will not benefit if regulators blunt incentives to invest and take risks.



"After three years of engagement with Ofcom, we now look forward to a judicial process which will apply impartial analysis and clear legal standards."



Ofcom has set a wholesale price of £10.63 per subscriber per month for each of Sky Sports 1 and 2 when sold on a stand-alone basis, 23.4% below the current wholesale price to cable operators.



Most consumers currently buy packages which include Sky Sports 1 and 2 and the wholesale price for this service bundle has been reduced by 10.5% to £17.14, Ofcom said.



The regulator had warned Sky, which holds the rights to many major sporting fixtures, that it wanted to wholesale its premium content out to rivals more freely.



But football's Premier League and cricket and rugby's governing bodies argued the move would "irreparably damage" investment in the sports.



Premier League chief executive Richard Scudamore said: "The Premier League is at one with the rest of UK sport over Ofcom's ill-judged and disproportionate intervention in the broadcast market.



"Their proposed action will strip out competition for sports rights and hugely reduce the incentives of all bidders, Sky included, to invest in sports rights. The effect will be to subsidise companies that have shown little appetite for investing in our content and fundamentally damage the investment models that have helped sport become a successful part of the UK economy and made sport so attractive to UK consumers.



"Of course we will be considering Ofcom's findings in full and do not rule out a challenge to protect the interests of fans, clubs and the wider game."



England and Wales Cricket Board (ECB) spokesman Steve Elworthy warned the ruling could have implications for the amount Sky would be willing to pay for sports rights - with a knock-on effect for funding for the game.



Mr Elworthy said: "Broadcast revenues are vital to the health of our game and allow us to fund cricket at all levels.



"A decision like this could lead to less investment in sport. It fails to consider the damage it could cause to sports from the grassroots upwards and that's our biggest concern."



Rugby Football Union (RFU) chief executive Francis Baron said: "The RFU is incredibly disappointed that its concerns, and those of all other affected sports rights holders, have not been taken into account by Ofcom, whose consultation process was inadequate and flawed.



"Ofcom set out to review pay-TV but, in doing so, have ended up interfering in the sports rights market where they have no competence nor experience and their intervention will remove competition from the sports rights market.



"We will review this very seriously indeed to decide what our actions may be. Clearly we will be taking appropriate legal advice on this matter."



The watchdog Consumer Focus said: "This has been a mammoth review by Ofcom and the regulator's determination to put the consumer first deserves much praise.



"Sky has transformed millions of viewers' experience of sport but there are also real concerns about whether it has now too much power in the pay-TV market and has inhibited the development of rival TV platforms.



"We welcome Ofcom's moves to ensure fair and effective competition, which we hope will lead to more choice, further innovation and lower prices."



BT said it hoped to have competitive deals on offer to customers before the new Premier League season begins in August.



Ofcom also ruled that Sky must offer wholesale high definition versions of Sky Sports 1 and 2 to rivals but stopped at setting a price. Sky has also been granted permission to launch Picnic, the service to bring pay TV channels to Freeview, which it put on hold two years ago, subject to the satellite company agreeing to the sports channels deal.

Start your day with The Independent, sign up for daily news emails
Voices
Homeless Veterans charity auction: Cook with Angela Hartnett and Neil Borthwick at Merchants Tavern
charity appealTime is running out to secure your favourite lot as our auction closes at 2pm tomorrow
Arts and Entertainment
J Jefferson Farjeon at home in 1953
booksBooksellers say readers are turning away from modern thrillers and back to golden age of crime writing
Sport
Amir Khan is engaged in a broader battle than attempting to win a fight with Floyd Mayweather
boxing Exclusive: Amir Khan reveals plans to travel to Pakistan
News
Stacey Dooley was the only woman to be nominated in last month’s Grierson awards
mediaClare Balding and Davina McCall among those overlooked for Grierson awards
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA year of political gossip, levity and intrigue from the sharpest pen in Westminster
Voices
Joseph Kynaston Reeves arguing with Russell Brand outside the RBS’s London offices on Friday
voicesDJ Taylor: The great tradition of St Paul and Zola reached its nadir with a worker's rant to Russell Brand
News
Twitchers see things differently, depending on their gender
scienceNew study shows that birdwatching men have a lot in common with their feathered friends...
News
i100
Arts and Entertainment
Caroline Flack became the tenth winner of Strictly Come Dancing
tvReview: 'Absolutely phenomenal' Xtra Factor presenter wins Strictly Come Dancing final
Life and Style
A still from the 1939 film version of Margaret Mitchell's 'Gone with the Wind'
life
News
Xander van der Burgt, at the Royal Botanic Gardens, Kew
scienceA Kew Gardens botanist has found 25 new large tree species - and he's sure there are more out there
Arts and Entertainment
British actor Idris Elba is also a DJ and rapper who played Ibiza last summer
film
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Media

Ashdown Group: (PHP / Python) - Global Media firm

£50000 per annum + 26 days holiday,pension: Ashdown Group: A highly successful...

Ashdown Group: Analyst Programmer (Filemaker Pro/ SQL) - Global Media firm

£50000 per annum + 26 days, pension, private medical : Ashdown Group: A highly...

Ashdown Group: IT Support Analyst - Chessington

£25000 per annum: Ashdown Group: IT Service Desk Analyst - Chessington, Surrey...

Charter Selection: Graphic Designer, Guildford

£35000 - £40000 per annum: Charter Selection: This renowned and well establish...

Day In a Page

The week Hollywood got scared and had to grow up a bit

The week Hollywood got scared and had to grow up a bit

Sony suffered a chorus of disapproval after it withdrew 'The Interview', but it's not too late for it to take a stand, says Joan Smith
From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?

Panto dames: before and after

From Widow Twankey to Mother Goose, how do the men who play panto dames get themselves ready for the performance of a lifetime?
Thirties murder mystery novel is surprise runaway Christmas hit

Thirties murder mystery novel is surprise runaway Christmas hit

Booksellers say readers are turning away from dark modern thrillers and back to the golden age of crime writing
Anne-Marie Huby: 'Charities deserve the best,' says founder of JustGiving

Anne-Marie Huby: 'Charities deserve the best'

Ten million of us have used the JustGiving website to donate to good causes. Its co-founder says that being dynamic is as important as being kind
The botanist who hunts for giant trees at Kew Gardens

The man who hunts giants

A Kew Gardens botanist has found 25 new large tree species - and he's sure there are more out there
The 12 ways of Christmas: Spare a thought for those who will be working to keep others safe during the festive season

The 12 ways of Christmas

We speak to a dozen people who will be working to keep others safe, happy and healthy over the holidays
Birdwatching men have a lot in common with their feathered friends, new study shows

The male exhibits strange behaviour

A new study shows that birdwatching men have a lot in common with their feathered friends...
Diaries of Evelyn Waugh, Virginia Woolf and Noël Coward reveal how they coped with the December blues

Famous diaries: Christmas week in history

Noël Coward parties into the night, Alan Clark bemoans the cost of servants, Evelyn Waugh ponders his drinking…
From noble to narky, the fall of the open letter

From noble to narky, the fall of the open letter

The great tradition of St Paul and Zola reached its nadir with a hungry worker's rant to Russell Brand, says DJ Taylor
A Christmas ghost story by Alison Moore: A prodigal daughter has a breakthrough

A Christmas ghost story by Alison Moore

The story was published earlier this month in 'Poor Souls' Light: Seven Curious Tales'
Marian Keyes: The author on her pre-approved Christmas, true love's parking implications and living in the moment

Marian Keyes

The author on her pre-approved Christmas, true love's parking implications and living in the moment
Bill Granger recipes: Our chef creates an Italian-inspired fish feast for Christmas Eve

Bill Granger's Christmas Eve fish feast

Bill's Italian friends introduced him to the Roman Catholic custom of a lavish fish supper on Christmas Eve. Here, he gives the tradition his own spin…
Liverpool vs Arsenal: Brendan Rodgers is fighting for his reputation

Rodgers fights for his reputation

Liverpool manager tries to stay on his feet despite waves of criticism
Amir Khan: 'The Taliban can threaten me but I must speak out... innocent kids, killed over nothing. It’s sick in the mind'

Amir Khan attacks the Taliban

'They can threaten me but I must speak out... innocent kids, killed over nothing. It’s sick in the mind'
Michael Calvin: Sepp Blatter is my man of the year in sport. Bring on 2015, quick

Michael Calvin's Last Word

Sepp Blatter is my man of the year in sport. Bring on 2015, quick