EU may force Sky to sell Premier League rights to rivals
from The Guardian
Broadcasters who win the rights to televise live Premier League football
could be forced to sell some games to rivals under proposals drawn up by
media regulator Ofcom.
The plans, if adopted by the European Commission, which is investigating the
sale of Premiership TV rights, would end the 13-year monopoly of satellite
group BSkyB.
The forthcoming auction of rights from the start of the 2007 season could
see the most radical changes to domestic football coverage since the
league's inception in 1992. An existing idea from the regulators could see
individual broadcasters limited to 50% of the live games put up for sale, an
idea that has been strongly resisted by the Premiership. The additional
constraint means the winners of the rights to televise Premiership games
2007-2010 would have to sub-license the games on a "fair and
non-discriminatory" basis. In practice, a broadcaster such as cable company
Telewest would be able to approach a winner of the rights and demand what
amounts to a secondary auction.
If adopted by the EC, the notion of exclusivity would be eradicated from
Premier League coverage and other broadcasters (from free-to-air operations
such as Freeview to platforms such as Home Choice) would be allowed to carry
premium content - a key aim of the "Lisbon Agenda" set five years ago - if
they are able to pay for them.
The proposals come amid escalating tension between the commission, which is
determined to break up Sky's monopoly, and the league. In a letter to the
commission sent late on Thursday night, the league is understood to have
opposed the idea of a 50% cap as it believes that football clubs make more
money from enjoying an "exclusivity premium". TV rights are the main source
of income for Premiership clubs, many of whom would face hardship if their
income was to fall.
Commission officials have accused the league of taking a "step backwards"
from an agreement made at the end of 2003, when the last three-year deal was
agreed. A spokesman for the European competition commission confirmed that
it would begin legal proceedings against the league "in the next few weeks".
This so-called statement of objections, which in theory can lead to fines of
up to a tenth of turnover, will accuse the league of breaking competition
laws. "We remain determined that the rights for 2007 onwards be sold in a
manner which complies with the competition rules, and in particular to the
terms and conditions outlined in the provisional agreement reached between
the FAPL [the league] and the commission in December 2003" said the EU
official.
Officials are furious that the league has not addressed EC concerns about
the way live TV rights are sold. They have also accused the league of
"dragging their feet" with last week's letter missing a self-imposed
deadline. "It's just another manifestation of them taking the ****," said
one source close to the commission.
The EC made its feelings known in a letter to the Premier League in July, in
which it made clear that it would be adhering to an agreement reached at the
end of 2003. That deal read: "The Premier League has agreed that after 2006
the tendering procedures for TV rights will ensure that there are at least
two television broadcasters of live Premier League matches: the Premier
League will create balanced packages of matches showcasing the Premier
League as a whole, and no one broadcaster will be allowed to buy all of the
packages."
Any attempt by the Premier League to present the EC with a "fait accompli"
by starting the auction process before it is agreed would also be "strongly
resisted".
The commission wants to hold the Premiership to the earlier agreement that
it would "examine, jointly with the commission, the way in which the
auctions are conducted to ensure that they do not exclude potential
competitors."
The increasingly acrimonious spat is reminiscent of the protracted
wranglings last time the three-year rights came up for grabs. The EC started
legal proceedings in 2002 by filing a statement of objections. At the time,
Brussels regulators were also furious that the league agreed a new contract
with BSkyB before ironing out an EC-approved deal.
Perhaps significantly, Sky agreed to sub-license up to eight "top quality
Premier League matches" each season to another broadcaster in order to win
European approval. The EC trumpeted this pledge as meaning "that for the
first time in the history of the Premier League free to air television will
have a realistic opportunity to show live Premier League matches". Such
hopes were dashed however when no rival broadcaster met the asking price set
by Sky.
This time round, the EC has asked Ofcom to research the market. Its consumer
research - which shows dissatisfaction among fans and frustration that too
few games are shown on too few broadcasting platforms - has privately been
criticised by the league.
Several potential rivals to Sky have declared an interest in bidding for the
rights, if the terms are right. These include cable companies NTL and
Telewest and ITV, Channel 4, Five and Setanta and several private equity
groups. Last week, Charles Allen, the chief executive of ITV, said eight
games were not enough.
