Ofcom Drops Sky and BT Linked Probe into Premier League TV Rights - ISPreview UK
Ofcom’s long running probe into the rising cost of Premier League TV rights (football, rugby etc.), which was started by Virgin Media in 2014 and followed frustration over the impact of a bidding war between BT and Sky (Sky Broadband), has today been closed. But a few positive tweaks are coming.

BT began to break Sky’s dominance of Premier League TV rights with the launch of their new BTSport content in 2013, which offers a wide selection of live TV matches to subscribers of their broadband, mobile, phone and or TV bundles as an included (“free“) bonus. On top of that it’s also possible to get premium EU sport by paying a bit extra (+£6 per month) for the BTSport Pack upgrade.

Unfortunately BT’s effort also created a bidding war with Sky, which was again highlighted by last year’s colossal £5.136bn deal for Premier League TV football rights in the 2016/17 to 2018/19 seasons. Overall Sky won 126 live Premier League matches a season (around £1.39bn per year) and BT secured exclusive live rights to 42 matches (around £320m per season).

All of this has created a culture of rising prices, which is something that neither consumers nor third-party broadcasters of the same content appreciated. In 2014 Virgin Media attempted to tackle this problem head-on by nudging Ofcom to launch an investigation into how the Premier League sells its live TV and related rights for football matches (here).

Virgin claimed that the current approach had resulted in “significant consumer harm” and that part of the problem stemmed from the fact that the proportion of matches made available for live television broadcast under the current Premier League rights deals – at 41% – is lower than some other leading EU leagues, where more matches are available. Solving this, claimed Virgin, might help to tackle the problem of higher prices for consumers.

The bad news is that Ofcom has today closed their investigation, which they said is partly because “significant further work” would be required and their “resources could be used more effectively on other priorities to benefit consumers and competition” (e.g. the DCR Strategic Review), but the next phase of bidding may at least benefit from a few tweaks.

Ofcom’s Statement

The investigation, carried out under the Competition Act 1998, considered whether the selling arrangements of the Premier League restricted or distorted competition.

In closing the investigation, Ofcom has taken into account the Premier League’s recent decision to increase the number of matches available for live broadcast in the UK, to a minimum of 190 per season from the start of the 2019/20 season. This will be an increase of at least 22 matches per season over the number sold for live broadcast in the Premier League’s auction in 2015.

The Premier League’s decision to increase matches available in its next auction for live TV rights builds upon commitments given to the European Commission in 2006.

The next auction will include a ‘no single buyer’ rule, which means that more than one broadcaster must be awarded rights. At least 42 matches per season will be reserved for a second buyer, of which a minimum of 30 will be available for broadcast at the weekend.
The regulator also conducted a consumer survey to understand the preferences of match-going fans and those watching on TV in relation to Premier League matches. The research found that a fifth of fans said they wanted to see more matches televised live and a similar proportion said they were happy with the overall number of matches broadcast live, but wanted to see different matches shown. Another key factor was kick-off time, with two-thirds of fans preferring 3pm on a Saturday.

The outcome means that we can perhaps still expect further price rises after the next batch of Premier League TV rights becomes available, although it remains to be seen whether Sky in particular will bid as highly as they did in 2015.

Tom Mockridge, CEO of Virgin Media, said:

Football fans will now be able to watch more live action on TV. As the only TV provider to offer all the available games, we are pleased that after a two year campaign the Premier League has agreed to offer more TV games.”
In fairness this was already going to be a tough nut to crack because of aggressive but natural competition, where one side is clearly willing to best the other by significantly out-bidding them and thus pushing the prices up for consumers. The new 42 match reservation rule might however help to alleviate some of that.