BSkyB Wins U.K. Appeal of Regulator’s Order on Sports Channels
British Sky Broadcasting Plc (BSY), the U.K.’s biggest pay-television provider, won an appeal against a regulator’s decision forcing it to make its sports channels available to competitors at set wholesale prices.
The Competition Appeal Tribunal made the ruling today in London following a challenge of the 2010 pricing order by U.K. media regulator Ofcom. Lawyers for BSkyB had argued Ofcom’s decision was a “dramatic intervention” that treated FA Premier League soccer matches like a “public good.”
The judgment was confidential and only provided to the parties in the case. In a public summary of its ruling, the tribunal said it concluded “that Ofcom’s core competition concern is unfounded.”
BSkyB, controlled by Rupert Murdoch’s News Corp. (NWSA), agreed to pay 1.62 billion pounds ($2.53 billion) in 2009 to show most live Premier League soccer matches between 2010 and 2013. BSkyB, based in Isleworth, England, has bet its business model on showing exclusive sporting events and films, and Ofcom’s order forced access to its popular Sky Sports 1 and 2 channels.
BSkyB had argued Ofcom should be barred from setting prices for the soccer matches below the market rate, and that competition rules cited by the regulator don’t apply to the sports channels. Ofcom said BSkyB hurts consumers by charging competitors too much to broadcast the games.
After a three-year investigation, Ofcom said BSkyB was using its “market power” to limit distribution to rivals. While BSkyB appealed over claims Ofcom went too far, its competitors -- BT Group Plc (BT/A), the biggest U.K. phone company, and cable-TV provider Virgin Media Inc. (VMED) -- intervened in the case to say the regulator didn’t go far enough.
BSkyB in April 2010 reached a temporary deal with Virgin and BT, under which they agreed to put the difference between Ofcom’s mandated price and BSkyB’s higher price into an escrow account pending the result of the appeal.
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