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SBD Global/April 9, 2013/Media

U.K. TV Regulator Investigates BSkyB's Refusal To Air Rival BT Sports Adverts

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BSkyB's refusal to run advertisements promoting BT's rival sports channels is being investigated by the Office of Communications "after the telecoms group expressed concerns that the satellite broadcaster was breaching TV advertising regulations," according to Robert Budden of the FINANCIAL TIMES. BT is looking to roll out as many as three sports channels this summer, as it seeks to ramp up its TV offering to attract new customers to its "triple-play" service: TV, home phone and broadband. By advertising the new service on Sky channels, "BT would have been able to target the satellite broadcaster's customer base" of more than 10 million homes. BT Vision, the telecoms operator's TV service, "currently has around 770,000 customers." However, while Sky already runs advertising for BT's telephone products across many of its channels, "it has argued that running BT Sport adverts could undermine the competitive offering of its own sports channels." Sky said, "There are many other avenues for BT to advertise its sports channels without seeking to take advantage of the investments that we've made to build Sky Sports. It's entirely reasonable for us to choose not to carry advertising for a directly competing service" (FINANCIAL TIMES, 4/8).

BITTER RIVALS: In London, Mark Sweney wrote BT complained to media watchdog Ofcom about the satellite giant's actions, "in an escalation of the bitter rivalry between the two media giants." A key part of BT's strategy to build awareness and viewers "is to run TV advertising on BSkyB targeting the existing football and sports fans" among its 10 million-plus subscriber base. However, BSkyB has refused to air BT's ad campaign -- "which as well as football was to highlight other sports it has secured TV rights for including Premiership Rugby, European Cup Rugby and top-flight women's tennis" -- although it is not clear on what grounds. BT has lodged a complaint with Ofcom on the grounds that BSkyB is showing "undue discrimination" against it by refusing to air the campaign. BT Retail Consumer Division Managing Dir John Petter said, "We are happy to take Sky's advertising but they seem afraid of taking ours. It's like a rottweiler running away from a newborn puppy" (GUARDIAN, 4/8). 

SENSING A THREAT? Also in London, Katherine Rushton wrote BSkyB, which is 39% owned by Rupert Murdoch's News Corp., said that it is "entirely reasonable" to block a competitor's adverts on its own sports channels. Although BT has had a relatively small television service for some time, "the telecoms company caught BSkyB off-guard" when it staked a £738M ($1.12B) bet on Premier League rights last June. BSkyB has downplayed the threat that BT poses, "but industry analysts have interpreted its decision to block BT adverts as an indication that it is feeling vulnerable" (TELEGRAPH, 4/8). In L.A., Georg Szalai wrote, "ESPN as a current Premier League rightsholder has run soccer ads on BSkyB's Sky Sports." However, "it has a deal to carry BSkyB channels, while BSkyB carries ESPN." BT "does not currently have a deal" to air its sports networks on BSkyB (HOLLYWOOD REPORTER, 4/8).
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