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EU gives in to BSkyB over football rights, ntl backs out of bidding [Update 1]

# Nov 19, 06:45 PM by Frank

Under pressure from the Premier League, BSkyB and government ministers, the European Commission has spectacularly climbed down over the sale of Premier League media rights. Meanwhile, ntl indicated it may abandon plans to challenge Sky’s dominance of live Premiership football coverage.

Just over a month ago, competition officials in Brussels were talking about splitting the rights to 138 live matches a season into two parts to smash the 13-year monopoly held by Sky and allow rival broadcasters realistically to compete.

However, the agreement announced yesterday between the Commission and the Premier League for the structure of the auction for the rights for 2007-10 rights was far from that premise. It was the best possible outcome for Sky, while at the same time fending off the threat of legal action by the Commission. Under the new TV football agreement, Sky will still be able to bid for five of the six new packages of matches on offer, or 83% of matches. Numis Securities described the result as “enormously good for Sky”. The EC claimed the compromise deal would give fans “greater choice and better value”, but this appears to be now not the case as ntl has stated that it will “unlikely…bid for the majority of the rights”.

ntl’s decision, coupled with the reluctance of other free-to-air broadcasters to compete head on with Sky, suggests that the satellite broadcaster is likely to win a near clean sweep of the next set of live television rights in 2007.

The deal will be agreed by the chairmen of the Premiership clubs, as it is well known they would have preferred a continuation of Sky’s 13-year monopoly (most recently at a price of £340 million a year). According to yesterday’s Times, few in the TV industry see how the economics can work, making a mockery of the condition set by Neelie Kroes, Europe’s Competition Commissioner, that at least two broadcasters have a “viable and meaningful” share of the rights.

In a strongly worded statement, ntl said that the Commission had “failed to deliver a level playing field for competition” and was “refusing to amend the auction rules in a way that makes it feasible for other parties to bid for substantial packages of rights”.

The end result – you may see a paltry 23% of Premier League games on ntl Digital TV in 2007. Or perhaps they will be on Five or ITV. Way to go European Commission.

Update 1

Since our original article, ntl have contacted us to point out that even though they won’t own the rights to matches, customers will still have access to 100% of the games if they subscribe to a premium package that includes Sky Sports. Malcolm Padley wrote in an email to us: “ntl customers will continue to have access via Sky Sports, just as they have today, even though we don’t own the rights.”

We also wrote ”...competition officials in Brussels were talking about splitting the rights…” ntl also pointed out that it was not the European Commission that wanted to split the rights, although that is not what we wrote. Clearly competition officials would be talking about splitting the rights, as that was what ntl requested.

To clarify, according to numerous media oulets, it was ntl and ITV that requested the 50/50 split and not the EC. “It is unlikely that we will bid for the majority of the rights in the absence of a 50 per cent maximum rule and equal quality of games between packages,” Sports Illustrated quotes ntl as saying.

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