UK media regulator Ofcom has opened an investigation today (Tuesday) into how the Premier League sells domestic live rights for matches from the top division of English football.
The investigation will be carried out under the UK’s Competition Act and follows a complaint from pay-television operator Virgin Media that was submitted to Ofcom in September.
Virgin Media took to Ofcom ahead of the next Premier League rights tender, which is expected to launch in the new year with the next batch of three-year deals announced before the end of the current 2014-15 season.
Pay-television broadcasters BSkyB and BT Sport are the current rights-holders to the Premier League in the UK. BT acquired two of the seven available rights packages in the three-year cycle from 2013-14 to 2015-16, for £246m (€308m/$387m) per season, with Sky acquiring the other five packages for £760m per season.
Virgin Media asked Ofcom to open an investigation, claiming that “significant consumer harm resulting from escalating rights costs” can be addressed through changes to the model for selling live rights.
Virgin Media’s complaint alleges that the current arrangements for the collective selling of live UK television rights by the Premier League are in breach of competition law. In particular, the complaint raises concerns about the number of Premier League matches made available for live coverage.
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-television packages that include premium sport channels and for the pay-television retailers of premium sports channels.
Ofcom said that it would consider whether there is a breach of the UK and/or EU competition law prohibition on agreements and decisions which restrict or distort competition. It added: “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.”
However, Ofcom has noted that the timing of the investigation could have an impact on the Premier League’s planning for its next rights tender.
Ofcom added: “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. 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.”
Responding to the Ofcom investigation, the Premier League said: “Ofcom has stated that this is at an early stage and it has not reached a view as to whether there is 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.”