By Mark Baber
December 16 – The multi-billion pound auction for Premier League television rights, which kicked off on Friday, has led to a 4.4% fall in the share price of Sky plc on Monday on fears the company could be outbid by BT on a number of packages, and predictions the total bill could be as high as £5 billion, An Ofcom investigation, initiated by Virgin, has added to the lack of stability in the market.
Three years ago the Premier League sold the live rights to 154 matches per season for a total of £3 billion – with Sky winning five rights packages totalling 116 matches and BT two totalling 38 matches.
This time around there are 168 matches per season on offer, divided into seven packages, with the Monday package including ten Friday evening matches per season from 2016-17 onwards.
No single bidder is allowed to win more than 126 matches and the main bidders are expected to be Sky and BT with bids from Discovery Communications and Al Jazeera also potentially in the running. The amount Sky is willing to bid may be impacted by its recent purchase of Sky Deutschland and Sky Italia, whilst BT’s plans to buy O2 or EE may prevent a £5 billion total from being achieved.
The stakes are high as a recent survey indicates the football audience in the UK, on which Sky has built its empire, would quickly change allegiance to any broadcaster who offered more games or cheaper prices.
Meanwhile an Ofcom investigation sparked by Virgin Media (which has wholesale deals with Sky and BT) hangs over the whole process – with Virgin arguing the limitation of the supply, including the restriction of one domestic broadcaster per match and the ban on live coverage of 3pm kick-offs constitute breaches of the Competition Act and have led to the public being overcharged to watch live football.
Ofcom say they have invited the Premier League and the clubs to “attend a ‘state of play’ meeting” this week in order to “provide an update on progress of the investigation.”
For the Premier League clubs the restrictions and the high prices paid by the broadcasters (and a willing public) are a crucial source of income and one of the main reasons the Premier League has become the world’s richest, strongest and most entertaining league.
Or as a Premier League spokesperson put it; “This creates an attractive offering for broadcasters and fans; whilst allowing the continued protection of the Saturday 3pm ‘closed period’ – the purpose of which is to encourage attendances and participation at all levels of the sport at the traditional time at which English football takes place across the country.”
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