LONDON (Reuters) - Cable operator Virgin Media has called on British regulators to investigate the increasing costs of showing Premier League soccer matches, saying consumers were paying the price for a rights bidding war between broadcasters.
The company, owned by Liberty Global, said it did not plan to bid in the next rights auction, but as a network which carries the sports channels of BSkyB and BT it is affected by the rising costs those groups are racking up.
The price of broadcasting the country’s top-flight matches has risen steadily since BSkyB, partly owned by Rupert Murdoch, built a business around showing the likes of Manchester United, Arsenal and Liverpool in the early 1990s.
The most recent rights package, a three-year deal running to 2016, was sold for 3 billion pounds ($5 billion), up 70 percent on the previous deal, and Virgin says the high prices are being passed on to customers, deterring many from signing up.
BSkyB and BT are likely to bid again when the next auction round starts - expected towards the end of this year - and Virgin predicts prices could rise by a further 60 percent.
“The rapidly rising cost of Premier League live broadcast rights means UK fans pay the highest prices in Europe to watch football on TV,” said Brigitte Trafford, Virgin Media’s chief corporate affairs officer. “Virgin Media has asked Ofcom to investigate how the rights are sold ahead of the next auction.”
Virgin believes British viewers are paying three times as much as fans in other European leagues, though escalating TV revenues have also helped bankroll a multi-billion pound spending spree by top clubs, such as Manchester United’s splurge this summer on the likes of Angel di Maria and Radamel Falcao.
The issue of British sports broadcasting has been investigated before, when the European Commission forced the Premier League to sell its rights to more than one media group to increase competition in 2006.
Virgin said on Tuesday it had filed a complaint to Ofcom, the national regulator, two weeks ago on the basis that current rules are still stifling competition and resulting in high prices for fans. Ofcom is examining the issue and deciding whether to launch a full investigation.
Among the differences between the broadcasting of the top tier of English soccer and its counterparts elsewhere in Europe is that about 40 percent of Premier League matches are broadcast live, compared with 100 percent in Italy, Spain and Germany.
With fewer matches shown live, there is generally only one match shown at any time, partly because of the Premier League’s commitment to schedule as many weekend fixtures as possible to kick-off at 3 p.m. (1400 GMT) on a Saturday, with the rights deal barring live broadcasts of those matches to protect attendance figures.
Less exclusivity around the broadcasting of rights, with more matches shown by more channels, could result in the big media groups paying less for those deals than they do now.
BSkyB, Britain’s dominant pay-TV group, is seen in more than 10 million homes, with analysts estimating that almost half of those take its sports packages.
The BT sports channels, which are used to increase loyalty to the group’s core broadband package, are available in 5 million homes, including almost 2 million who can see the channels via the Virgin platform.
“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,” the Premier League said in a statement.
“If Ofcom chooses to investigate this complaint, we will of course be happy to demonstrate to Ofcom that this is the case.”
Editing by David Goodman