Ofcom to investigate Premier League rights

UK comms regulator Ofcom has opened an investigation into how the English Premier League sells live UK audio-visual media rights for Premier League football matches.

The investigation will be carried out under the Competition Act and follows a complaint from Virgin Media, which was submitted to Ofcom in September.

As set out in section 25 of the Competition Act, Ofcom may conduct an investigation where there are reasonable grounds for suspecting that there is an agreement which has as its object or effect the prevention, restriction or distortion of competition within the UK and/or the EU.

Ofcom will consider whether there is a breach of the UK and/or EU competition law prohibition on agreements and decisions which restrict or distort competition.

Process

In the initial phase of the investigation, Ofcom expects to gather further information using its powers under the Competition Act.

The initial analysis of this information will help inform Ofcom’s view on whether and how to proceed further with the investigation.

This case is at an early stage and Ofcom has not reached a view as to whether there is sufficient evidence of an infringement of competition law for it to issue a statement of objections. Not all cases result in Ofcom issuing a statement of objections. As a result, there are not currently any further estimates of the timing of any later investigative steps.

The complaint

Virgin Media’s complaint alleges that the arrangements for the ‘collective’ selling of live UK television rights by the Premier League for matches played by its member clubs is in breach of competition law.

In particular, the complaint raises concerns about the number of Premier League matches for which live broadcasting rights are made available.

Virgin Media argues that the proportion of matches made available for live television broadcast under the current Premier League rights deals – at 41 per cent – is lower than some other leading European leagues, where more matches are available for live television broadcast.

The complaint alleges that this contributes to higher prices for consumers of pay TV packages that include premium sport channels and for the pay TV retailers of premium sports channels.

The Premier League rights auction

Ofcom is mindful of the likely timing of the next auction of live UK audio-visual media rights, and is open to discussion with the Premier League about its plans.

Scheduling of live matches on TV

Ofcom understands that the scheduling of football games is important to many football fans, in particular attending 3pm kick-offs on Saturdays. The investigation will take this into account and Ofcom plans to approach the Football Supporters’ Federation and certain other supporters’ groups to understand their views.

The Premier League noted that Ofcom had launched an inquiry which was at an early stage and had not reached a view as to whether there was sufficient evidence of any infringement.

“The Premier League currently sells its audio-visual rights in a way that is compatible with UK and EU competition law and will continue to do so. We will be able to demonstrate that as part of this process,” it declared in a Statement.

Virgin Media’s chief executive Tom Mockridge described the announcement of the investigation as “welcome news”, suggesting the Premier League was a global success story and one of the UK’s greatest exports and that everyone wanted that to remain the case.

“The fact remains that fans in the UK pay the highest prices in Europe to watch the least amount of football on TV. Now is the right time to look again at the way live rights are sold to make football even more accessible,” he stated. “We look forward to working constructively with the Premier League, the wider industry and Ofcom to ensure a better deal for football fans.”

The most recent rights auction for three seasons starting from the 2013-14 campaign saw Sky and BT secure 116 and 38 games respectively for a combined £3.018 billion (Sky £2.28 billion; BT £738 million), a 70 per cent increase on the previous rights.

Sky’s 116 games are the maximum allowed for one broadcaster under EC competition rules and it paid a premium of around 40 per cent to keep its dominant position as the main broadcaster of Premier League football.

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