On January 12 a High Court hearing will begin which could have
far-reaching implications for the televising of major sports events in
The action is the Office of Fair Trading’s case against the Premier
League over the deal which gives BSkyB exclusive TV rights to every live
Premier League football match. The current five-year deal cost BSkyB
pounds 670m for exclusive live rights to all Premier League matches
played each season until 2001, with the BBC paying pounds 73m for the
right to broadcast highlights on Match of the Day.
The OFT’s concern is that the deal has been reached by all 20 Premier
League’s clubs together - effectively acting as a cartel to limit supply
and push up prices.
On the case
The case will be heard by the Restrictive Practices Court and the OFT
has outlined four main areas which it feels are unsatisfactory:
- Unsatisfied consumer demand for televised coverage of Premier League
games (only 60 out of 380 are shown live).
- Restrictive supply (of games and rights) to push up prices.
- One company, BSkyB having a dominant position in the supply of sports
channels in the UK.
- Lack of access to live football coverage impeding the development of
competition in the pay-TV market.
The court has the power to order the Premier League deal with BSkyB to
be terminated immediately or at a given date. Until now attention has
focused on the impact a decision in favour of the OFT would have on
BSkyB and the Premier League. But it could also affect other TV sports
deals already in place.
Simon Johnson, ITV’s head of legal business affairs, said: ’A decision
against the Premier League deal would have massive implications for the
whole business of securing sports rights for television.
’You only have to think of other sports, such as Rugby League, the
Nationwide League or even F1 where there is collective negotiation on
behalf of the sport.
’A ruling against the Premier League-BSkyB deal could create significant
difficulties for both sports and broadcasters.’
It is impossible to exaggerate the importance of Premier League games to
BSkyB. It was football which transformed BSkyB from a company making
losses of pounds 14m a year in 1990 to pre-tax profits of pounds 300m in
1997. But BSkyB has shown the value of football in the era of pay-TV, a
lesson not lost on rivals or the Premier League clubs. With grounds
around the country regularly sold out, there is money to be made from
televising some of the 320 matches per season that are not shown live.
This season the Football League has agreed a deal with Sky to show six
Increasing the stakes
BSkyB knows the clock is ticking. Its bid for Manchester United is an
admission that its domination of live Premier League coverage is
unlikely to last.
If BSkyB can’t have exclusive rights to all the top games, then it can
at least secure a key role by owning one of the world’s biggest football
Here too, BSkyB’s bid for United has been referred to the OFT. A
decision is due early next year.
But many, including its rivals, argue that it should be the market
rather than the courts that determine the pace and nature of the changes
in televising Premier League football.