Britain’s Competition Appeal Tribunal has ruled against a decision by UK media regulator Ofcom that pay-television broadcaster BSkyB must make its flagship sports channels, Sky Sports 1 and 2, available to rivals at reduced wholesale prices.
Ofcom said it was “very surprised and disappointed” after its 2010 decision – to reduce the price of either of the two Sky channels by 23 per cent to £10.63 (€13.63/$16.63) per month and to reduce the wholesale prices of both channels combined by 10.5 per cent to £17.14 per month – was reversed.
“The tribunal has concluded that Ofcom’s core competition concern is unfounded,” the tribunal said in its ruling. “That concern is based on the finding to which we have referred, namely that Sky has deliberately withheld from other retailers wholesale supply of its premium channels, preferring to be entirely absent from those retailers’ platforms rather than to give them wholesale access, and that in doing so Sky has been acting on strategic incentives unrelated to normal commercial considerations of revenue/profit maximisation. The tribunal is of the view that Ofcom has, to a significant extent, misinterpreted the evidence of these negotiations, which does not support Ofcom’s conclusion. We have found a significant number of Ofcom’s pivotal findings of fact in the statement to be inconsistent with the evidence.”
Sky said: “This finding supports the argument that Sky has been making consistently over the last five years.”
Sky’s lawyers had argued that Ofcom’s original decision was a “dramatic intervention” that treated English Premier League football matches like a “public good.” Sky is the primary live UK rights-holder for Premier League games.
Cable-television broadcaster Virgin Media said it was “simply not credible that the Competition Appeal Tribunal has concluded there are no problems in a market which Ofcom spent three years investigating.”
The tribunal’s ruling can be appealed in the next month.