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Virgin Media Complains To Ofcom About English Premier League Television Rights

Virgin Media "called for a competition inquiry into the cost of Premier League football," months before a rights auction that is expected to attract more than £3B ($4.9B) in bids from its rivals Sky and BT, according to Mance & Thomas of the FINANCIAL TIMES. The cable group said that the U.K. telecom regulator Ofcom should consider "targeted changes to the way in which live rights are sold" in order to avoid consumers paying increasing sums to watch the same number of games. Virgin Media Head of Corporate Affairs Brigitte Trafford said, "The rapidly rising cost of Premier League live broadcast rights means U.K. fans pay the highest prices in Europe to watch football on TV." The value of the rights increased 70% to £1B ($1.6M) a year in the last auction, "largely due to the emergence of BT as a serious competitor to BSkyB." Virgin Media "is likely to feel squeezed by the bidding war, as it resells others’ sports channels at a loss in order to protect its own broadband business" (FT, 9/30). REUTERS' Kate Holton reported Virgin Media, owned by Liberty Global, said that "it did not plan to bid in the next rights auction, but it is affected by the prices paid through its role as a wholesaler of sports channels." Virgin Media "filed its complaint to regulator Ofcom two weeks ago and is expecting a response toward the end of October or early November." It "filed the complaint on the basis that the current rules are stifling competition." Among the differences between the broadcasting of the top tier of English football and its counterparts elsewhere in Europe is that about 40% of EPL matches are broadcast live, compared with 100% "in markets such as Italy, Spain and Germany" (REUTERS, 9/30).

TARGETED CHANGES: In London, John Plunkett wrote Virgin Media said "targeted changes" in the way live rights were sold could bring an end to the escalating cost. In the U.K., under the last rights deal, only 41% of Premier League games were up for grabs, "although the league has an agreement, supported by the government, that it does not broadcast games at the traditional (but now less common) Saturday afternoon kick-off time of 3pm to protect attendances." Such a change "would be little short of a revolution for the Premier League, which last sold its rights in seven different packages of either 12 or 26 matches with no single broadcaster permitted to own all seven" (GUARDIAN, 9/30). The BBC reported the Premier League said that its audio-visual rights had "always been sold in a transparent and open process." It said in a statement, "Regulators have examined our rights packaging and sales process in considerable detail in the past and found both of them to be compliant with UK and European competition law" (BBC, 9/30). The PA reported Virgin Media's complaint "is understood to suggest that fans" in the U.K. have to pay £51 ($82) monthly for access to all top-flight matches on TV, while it is £25 ($41) in Italy, £21 ($34) in Germany, £18 ($28) in Spain and £10 ($16) in France (PA, 9/30).

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