EC threatens to pull plug on BSkyB deal

The Premier League's next television deal with Sky is under threat after the European Commission said yesterday that the broadcaster's monopoly was "bad for competition" and "bad for consumers".

The worst-case scenario for the League would see it forced to re-auction its live rights for the three seasons from 2004-05 onwards, ensuring that more than one broadcaster shares them. This would inevitably lead to a drop in revenue, with the League's clubs bearing the cost.

The Commission argues that Sky, which has agreed to pay £1.024bn for its next deal, has a monopoly on the rights. Mario Monti, the EC's Competition Commissioner, said the deal "suggested BSkyB will have an even greater monopoly over live TV rights than was the case in the past. This is bad for competition on broadcasting markets. That is bad for consumers."

The League split its live rights from 2004 onwards into four packages to encourage competition but Sky still ended up with all packages. The Commission immediately requested details of the auction process to gauge how genuinely competitive it was. Some of the packages had only one bidder - Sky - although the League will not make this information public.

The League has responded to Monti's initial request for information and remains confident that it sold its rights in a "fair, open and competitive auction".

Monti remains unconvinced and is pressing ahead with further investigations. "The circumstances and the results of the bidding process and in particular the consequent elimination of competition raise serious concerns," he said.