BSkyB’s new deal with the Premier League could be in jeopardy after the European Commission said that it had serious reservations about the way that the football rights had been distributed.
In August, the broadcaster agreed to pay £1.024 billion for all four packages of live Premiership rights available for three seasons from 2004-05 onwards. Sky already has an exclusive hold on live top flight football and the competition authorities were known to have concerns about this summer’s bidding process.
The rights were split into separate packages in an attempt to encourage offers from other broadcasters but despite interest from ITV, NTL and Telewest, Sky swept the board. Mario Monti, the EU Competition Commissioner yesterday described this outcome as “bad for competition” and “bad for consumers.”
The Commission is believed to be drawing up a “formal statement of objections” which will be sent to the Premier League and BSkyB for consideration. This could result in the deal being scrapped and the rights auction restarted. The implication is that BSkyB is likely to lower its bids if forced to share live rights with other broadcasters.
“The circumstances and the results of the bidding process and in particular the consequent elimination of competition raises serious concerns,” said Monti. “The announcements so far made by the Premier League suggest that BSkyB will have an even greater monopoly over live TV rights than was the case in the past. This is bad for competition on broadcasting markets and bad for consumers.”
The intervention of the EU is a blow to the Premier League which had sought to get the best possible deal for its clubs following a global downturn in the value of sports rights. However, it continues to fight its corner.
“The packaging of our live rights entirely mirrors one of the Commission’s own proposals to remedy its concerns and create the conditions for competition,” said a League spokesman. “We then awarded rights packages to those who won them in a transparent, fair and competitive process.”
Monti’s comments have also dampened the mood at BSkyB which yesterday announced that it had achieved the target of 7 million DTH subscribers three months earlier than planned.
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