Sky in fresh setback over Premier League rights after Ofcom scrutinises 'strong market position'

 

Gideon Spanier
Friday 19 December 2014 14:01
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Sky has received a fresh blow as media regulator Ofcom said it would look into the satellite giant’s “strong market position” in the wider pay-TV sports market.

Ofcom is carrying out a review into whether its regulation that requires Sky to offer its Sky Sports 1 and 2 channels to other pay-TV providers such as BT to ensure fair and effective competition “remains appropriate”.

The regulator said Sky’s live TV football rights are “key” because they are “likely to be capable of influencing consumers’ choice of pay-TV retailer” and it wants to look again at whether “limited distribution of this content may harm competition”.

Ofcom pointed out that Sky holds over 75 per cent of live rights to Premier League football and has more than 80 per cent of market revenues from the supply of key sports channels.

The regulator added it was “seeking views on whether, given its market position, Sky may have incentives to limit distribution of its key sports content”.

BT, which has shaken up the pay-TV football market as a surprise entrant last year, welcomed Ofcom’s new inquiry.

Ofcom first ruled in 2010 that Sky must let Virgin and BT carry Sky Sports on a wholesale basis and BT said today that “this remedy remains essential to address the significant competition concerns with Sky’s supply of its channels”.

BT went on: “BT supports Ofcom’s initial view that maintaining regulation on Sky remains appropriate to ensure fair and effective competition and that no regulation of BT Sport is necessary.

“BT’s low share of pay revenues in the sector stands in marked contrast to Sky’s well-established dominance of the sector.”

However, Ofcom said it would be watching the new Premier League auction of live TV games, due to finish by February, and would also take into account the fact BT has scooped all the live Champions League TV rights from next year.

After years on the back foot, BT has seized the initiative and plans for a £12.5 billion acquisition of mobiles network EE has sent further shock waves through the sector this week.

Sky said it noted Ofcom’s planned consultation. “We are reviewing the document and we will engage with Ofcom on its content,” it said.

While Ofcom’s review was expected, Berenberg bank said Ofcom could make regulation “more difficult” for Sky. Ofcom has already launched a probe into whether the way the Premier League sells TV rights harms competition.

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