Media regulator Ofcom has said Sky’s dominance of UK pay-TV sports rights could harm competition, but it was “less clear” that obligations to share content with other broadcasters should be extended to its rival BT.
Ofcom said Sky’s dominance of live Premier League football, where it has more than 75% of the rights and 80% of the market revenues, meant other pay-TV retailers would be harmed if it limited distribution of Sky Sports 1 and Sky Sports 2.
Ofcom gave its initial assessment, published on Friday, as part of a review of its landmark “wholesale must offer” ruling in 2010, requiring Sky to offer Sky Sports 1 and Sky Sports 2 to other pay-TV operators, including BT, to ensure fair and effective competition.
The regulator said there had been significant developments in the market since the 2010 ruling, including the growth of smartphone and tablet viewing and the new generation of on-demand video providers such as Netflix and YouView.
However, Ofcom said it was not clear the wholesale must offer obligation should be extended to BT, even though it also shows live Premier League football and bought exclusive live rights to Champions League football, currently shared by Sky and ITV, which will begin next season.
Ofcom said BT had around 25% of live Premier League rights – 38 games a season to Sky’s 116 – as well as the Champions League.
“BT may also have incentives to limit distribution of its key sports content,” said the regulator.
“But given the amount of content rights it currently holds and its market position, it is less clear that limiting distribution of its sports channels would harm competition. Ofcom is seeking views on this assessment.”
The regulator also on Friday kicked off a public consultation on its review of wholesale must offer, four years after its initial ruling forcing Sky to offer Sky Sports 1 and 2 at a 23% discount to rivals as a curb on the satellite broadcaster abusing its dominant position in the market.
This prompted years of legal challenge and counter challenge, with BT only finally beginning to offer Sky Sports 1 and 2 to customers with YouView boxes on Tuesday.
The picture has been muddied not only by Ofcom’s review of the way the Premier League sells its live TV rights, following a complaint by Virgin Media, but also the impending bidding war for the next live TV rights deal for top flight English football, which is expected to be concluded by February next year.
Ofcom added: “The content Sky has is likely to influence the purchasing decisions of a sizeable proportion of high-value customers.
“Retailers that do not have access to this content would find it more difficult to compete for these customers.
“Given Sky’s continued strong market position, Ofcom is seeking views on its assessment that if there was limited distribution by Sky of its key sports content, competition between pay-TV retailers may be harmed.
“Ofcom is also seeking views on whether, given its market position, Sky may have incentives to limit distribution of its key sports content.”
The consultation will be followed by a second phase of Ofcom’s wholesale must offer review next year.
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