Ofcom has opened an investigation into the joint selling arrangements by the Premier League for live UK audio-visual media rights for Premier League football matches.
Ofcom's investigation into the sale of Premier League (PL) television rights in the UK(*1) follows a complaint made by Virgin Media in September 2014 claiming that consumers were suffering through the PL's rights auction process.
The PL is the richest football league in the world and sells broadcasting rights on behalf of its member clubs collectively. With broadcasting revenues its major income, the PL is widely regarded as the best rights holder at segmenting those rights and maximising its revenues: the latest UK rights auction saw BT and BSKYB pay a combined £3bn for their broadcasting rights to the 2013-2016 seasons, an increase of 70% on the previous deal(*2).
Virgin Media's complaint alleges that the PL's method of collectively selling rights packages limits the PL matches that are available for broadcast in the UK (currently 41%) and that this has resulted in consumers being charged the highest prices in Europe to watch top flight football.
Ofcom's investigation will now assess whether the object or effect of the collective selling of the PL UK(*3) broadcasting rights is the prevention, restriction or distortion of competition within the UK and/or the EU(*4).
The challenge to the collective selling of PL rights is nothing new and Ofcom's announcement follows a European Commission (EC) investigation into the PL in 2002(*5). The EC investigation resulted in a formal settlement where the PL agreed to sell its live television rights in six packages (both smaller and more balanced than previously) and to sell those rights to a minimum of two broadcasters from 2007 onwards(*6).
The latest (2012) PL UK rights auction involved 7 packages of live broadcasting rights (154 matches) of which BSKYB won 5 packages and BT won 2 packages (116 and 38 matches respectively). There were further packages of near-live matches (won by BSKYB), TV highlights (won by the BBC), mobile and internet clips (won by News UK) and radio rights (won by the BBC and talkSport).
The Virgin Media complaint seems timed to bite just before the next PL auction kicks off in 2015 where the UK broadcasting rights for the 2016-2019 PL seasons are tipped to reach the £5bn mark.
Virgin Media's argument that increasing the supply of matches will reduce costs will carry favour...