Virgin Media complains to regulator over Premier League rights auction
Neil_Harris
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Cable operator Virgin Media has complained to Britain's broadcast regulator over the way that rights to Premier League soccer matches are sold, saying that consumers are being forced to pay too high a price to watch games.
Britain's Virgin Media, owned by Liberty Global, says it does not plan to bid in the next rights auction but it is affected by the prices paid through its role as a wholesaler of sports channels from BSkyB and BT.
The two groups currently share the rights to the top flight of English soccer and are expected to bid again when the next Premier League auction starts this year. The price for the latest rights deal rose 70 percent when it was announced in 2012.
"The rapidly rising cost of Premier League live broadcast rights means UK fans pay the highest prices in Europe to watch football on TV," said Brigitte Trafford, Virgin Media’s Chief Corporate Affairs Officer. "Virgin Media has asked Ofcom to investigate how the rights are sold ahead of the next auction."
Virgin Media filed its complaint to media regulator Ofcom two weeks ago and is expecting a response towards the end of October or early November. It has filed the complaint on the basis that the current rules are stifling competition.
Britain's Virgin Media, owned by Liberty Global, says it does not plan to bid in the next rights auction but it is affected by the prices paid through its role as a wholesaler of sports channels from BSkyB and BT.
The two groups currently share the rights to the top flight of English soccer and are expected to bid again when the next Premier League auction starts this year. The price for the latest rights deal rose 70 percent when it was announced in 2012.
"The rapidly rising cost of Premier League live broadcast rights means UK fans pay the highest prices in Europe to watch football on TV," said Brigitte Trafford, Virgin Media’s Chief Corporate Affairs Officer. "Virgin Media has asked Ofcom to investigate how the rights are sold ahead of the next auction."
Virgin Media filed its complaint to media regulator Ofcom two weeks ago and is expecting a response towards the end of October or early November. It has filed the complaint on the basis that the current rules are stifling competition.
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If so, will it delay the next rights sale which the Premier League is keen to get in place before the next election on 7 May 2015? I know October/November is mentioned but these things can drag on a bit!
A report last week suggests otherwise:-
http://www.broadbandtvnews.com/2014/09/23/spain-most-expensive-country-for-pay-tv-sports/
Even if you say Spain is slightly above UK at the moment by the time the next round of PL rights have been negotiated that figure may well go up. Even if it doesn't UK is by a long way more expensive than every European country except 1.
You can calculate these things in different ways - do you include HD or not? What date is the £ to € currency rate exchange calulated? etc My guess is the Spanish site picked the criteria which put Spain at the top and VM picked the criteria which put the UK at the top.
Agreed but any increase in prices will always find its way through to the viewer regardless of how they dress it up.If we did have a powerful regulator instead of the useless OFCOM things would be different, but don't raise your hopes.
We haven't seen the full details of VM's complaint but it appears likely there their principal argument is that more live games should be shown. They may also be suggesting non-exclusivity for some games.
Both are subjects that have been discussed many, many times on this forum over the years!
http://www.theguardian.com/media/2014/sep/30/premier-league-tv-rights-virgin-media-ofcom
If OFCOM does decide to investigate VM's complaint it seems highly likely that any OFCOM investigation will take some time. And if OFCOM did rule against the PL we have the familiar possibility of an appeal to the CAT and then the Court of Appeal etc etc.
Bearing all the above in mind I do wonder if VM is a bit late making this complaint - just a few months before the 2016/19 auction is due.
If OFCOM does investigate, would the PL be able to just go ahead with the auction in the meantime anyway or would they have to wait for OFCOM's decision?
I don't know but I can easily see the PL arguing that they can't significantly delay the auction as clubs require visibility re revenues.
Aren't we still awaiting the outcome of the BT / Sky CAT Part 2? Given there are existing regulatory issues outstanding, I would think that they would carry on regardless unless an injunction was successfully granted by a civil court. I can't think of any broadcaster which would want to damage its commercial relationship with the PL by taking action like that.
If you in America you get every match on NBC SN so that must be significantly cheaper plus they get EVERY match unlike the UK which doesn't.
Yes we are - although that, of course, is in respect of different issues.
Yes, the more I think about it, the more I think this is very, very late in the day.
It's worth recalling that OFCOM's main Pay TV investigation following the complaint by VM, BT, TUTV and Setanta took 3 years to undertake (2007 to 2010) before OFCOM made its final ruling - and 4 more years later that is still being argued about in the CAT / Courts.
The other thing is the broader implications. Remember Tony Blair and Gordon Brown got involved with the EC before the EC made its ruling on the PL rights auction rules for 2007/13 - and in particular the subject of Sat 3pm kick-offs and the blackout is going to come to the fore.
I think it's very unlikely in practice that OFCOM would quickly step into the Sat 3pm issue and make a ruling which would change things dramatically - it's too big an issue with much broader implications outside of broadcasting.
If OFCOM tried to do this I would expect immediate Government intervention (whichever party is in power - ie whether pre or post General Election). Before any change was made I would expect the Government to order a much wider investigation (not by OFCOM) into the protection of the Football League, lower league and grass roots football.
Absolutely correct. OFCOM has no power at all over any sporting body, therefore any complaint will have no effect on the bid process directly.
If Virgin Media has made a complaint to OFCOM it would have to be regarding the provision of games to third party platforms (ie Broadcast platforms that do not hold any broadcast rights with the rightholders - in this case the rightholder is the premier league). This is the only issue that OFCOM would have a remit in with regards to broadcast rights/contracts.
Having said that, if Virgin Media have complained to OFCOM regarding the way that the Premier League sells it broadcast rights then what could happen is that OFCOM could come out and say that it is outside their remit, but the issue raised is of significant important that they will launch a consultation into the matter and if they find that there is 'unfair practices' then they can refer the issue to the Competition Commission.
However this is unlikely as the last time the competition commission was involved they basically passed the buck to the European Commission. This was when the ruling was brought in that for a set number of years the Premier League could not sell exclusive broadcast right to just one broacaster.
In a bizarre twist this ruling actually lead to the Premier League making more money as the Premier League has been able to play Sky off of whom ever else was in the market. This is why at the last round of broadcast right the Premier League kept the rule in place that no single broadcaster could win all the broadcast packages.
Admittedly with hindsight Setanta Sport was no rival to Sky. EPSN (parent company Walt Disney) did have the means to blow Sky out the water, but they were unwilling to spend and invest in their UK & European business. However since the arrival of BT on the scene we can be pretty sure that the only people who will benefit at the next round of boradcast rights will be the Premier League as both BT & Sky has too much riding on the result.
There is far too much money and not enough common sense in English football at the moment (the Bundesliga is for the most part a much better model with generally much cheaper ticket prices, although Bayern Munich are a little too dominant for the overall healthy of the league). However, that doesn't mean Virgin have a credible legal case, nor does Ofcom have much if any authority over this particular issue.
No
- It's per month not per match.
- The UK figure is €49.86 (about £39) not £51.
- It's not about watching the English Premier League in each country, it's about watching the top league in each country eg Bundesliga in Germany, Premier League in England and La Liga in Spain.
UK £51
Italy £25
Germany £21
Spain £18
France £10
The article also explains: http://www.bbc.co.uk/news/business-29426570
Too right!
I only have BT sport as its so far still free with my BT Infinity and BT TV package.
I always glad that some sports are still FTA for the time being anyway.
I don't watch a lot of sport but I do like to watch sport now and again.
Darren
The current scenario allows each broadcaster to have exclusive games that they pay through the nose for that they then have to charge the consumer for in turn.
The situation is fine for traditional commercial, non subscription based broadcasters as regardless of the winner, the consumer is not impacted.
For subscription providers all that happens is the consumer has to pay more providers, more money to watch the games.
True competition between the broadcasters would allow multiple stations to show the same games. Can you imagine the outcome if BT & Sky were both showing a Manchester, Merseyside or London derby? The broadcasters would be fighting to get viewers to watch their station with the carrot to customers being lower prices.
''The PL will argue that high costs mean better football. In truth it just means better-paid
footballers - not the same thing.''
Exactly as I predicted yesterday afternoon. OFCOM knows that it has no power and no direct remit on this issue (ie how rightholders sell their broadcast rights to broadcasters) but could launch a 'inquiry' into the issues raised by Virgin Media..
If the inquiry finds anything that OFCOM deems to be a problem then they would launch a consultation exercise it which they will invite Virgin Media (who raised the complaint), the directly interested parties (the Premier League, Sky & BT) and other parties (for example Smallworld Cable, BBC, ITV, the general public) to give input into the issues that OFCOM feels need addressing.
However with no remit to enforce any finding all the above would do would be to try and get Premier League to change the way they go about selling their broadcast rights.
It's worth bearing in mind that the way Premier League rights are sold has been looked at within the last 10 years by the European Commission (and european laws and their decisions always superseed any decision or law of any soverign nation that is a member of the EU) so it would not be an unreasonable position for the Premier League to say to OFCOM that as far as they are concerned a far higher body has already ruled on this issue and therefore unless the European Commission wants to look into this again we will continue with the tender & auction procedure as it currently is.
Now given that the wholesale of sky sports to 3rd party platforms case is still rumbling through the courts I would find it hard to believe that OFCOM will want to press ahead with this, especially seeing as the Premier League has volunterally kept to the tender & auction procedures that the European Commission imposed (the European Commission ruling was only for a set period of time and at the last auction the Premier League were free to sell their right anyway) therefore if the issue was brought back before the European Commission it would almost certainly uphold it's previous findings.
I've read a few very decent posts in my time but I have to say this post is one of the best and most detailed not to mention very informative.
Great stuff!!
However reading what has been said everywhere lets be honest to most obvious out come is.......no change!
The rights will go out for tender come December and probably soon after the New Year we will hear of a new multi billion deal between Sky and BT.