ECB concerned by Ofcom ruling

England cricket chiefs today criticised a ruling by Ofcom ordering Sky to cut the cost of selling their sports channels to rival broadcasters.

Sky will have to sell Sky Sports 1 and 2 for up to 23% less than the current wholesale price, according to the ruling by the broadcasting regulator.



Steve Elworthy, the ECB's director of marketing and communications, warned that 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.



The current ECB deal with Sky is worth £300million over four years and ends in 2013, and there are already fears that proposals to make the Ashes a listed event - reserved for free-to-air broadcasters - would reduce the value of the rights.



Elworthy told Press Association Sport: "We are very concerned about the implications of the decision.



"Broadcast revenues are vital to the health of our game and allows 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."



Ofcom said the decision, after a three-year investigation into the industry, would ensure "fair and effective competition".



Ofcom began investigating the pay TV market in March 2007 after concerns were raised by BT, Virgin Media, TopUp TV and Setanta, which has since gone bust.



The regulator said today: "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."



Sky immediately announced it will challenge the ruling.



A Sky spokesman said: "There should be no doubt that Ofcom's actions represent an unprecedented and unwarranted intervention.



"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."

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