Cut-price Sky Sports moves a step closer

Steve Dinneen
Follow Steve
SKY’S stranglehold over subscription TV took a hit yesterday as a court refused to postpone a ruling forcing it to slash the price it can charge rivals for Premier League football.

The ruling guarantees top flight games will be available across four platforms by the start of next season.
Sky, led by chief executive Jeremy Darroch, will be forced to wholesale its two major sports channels to BT Vision, Virgin Media and Top Up TV for the reduced rate set by Ofcom last month.

However, the Competition Appeal Tribunal (CAT) ruled the difference between Sky’s rate-card price and Ofcom’s reduced price – around £1.25 for both Sky Sports channels per customer per month – should be paid into an escrow account.

Sky will continue its appeal against the decision to slash its prices – a process that could take up to a year – and if it is successful the escrow money will be handed to the broadcaster. However, if Sky loses the appeal the cash will be returned to BT, Virgin and Top Up TV.

Despite having to pay the escrow money, BT was bullish over the ruling, throwing down a gauntlet to Sky.

A spokesman told City A.M.: “We will still be offering prices lower than Sky currently does – we’ll be putting something very competitive into the market.

“This ruling allows us to get our product out there in time for the start of the football season. We’re not looking at it as paying the full rate-card price, we’re looking at it as paying the reduced price plus an escrow payment.”

It is understood BT will offer Sky Sports 1 for around £15 and Top Up TV – which operates through Freeview – will charge around £18.

Ofcom welcomed the news as a triumph for football fans. A spokesman said: “The agreement is very good news for consumers. We look forward to the next steps in the process, including the formal appeal where we will defend the decisions we have taken, which are in the interests of UK consumers.”

Sky last night played down the significance, describing the agreement as a “sensible middleground”.

A spokesman said: “There are significant concessions to Ofcom’s original ruling. We always said we would sell the rights to BT and Top Up TV but we think the price should be commercially driven.”

The hearing was slated to last a single day but dragged on for a week.

Ofcom told Sky earlier this year it must slash its wholesale prices as they were unfair to consumers.

Sky is likely to see a short-term revenue spike thanks to the extra wholesale revenue. However, the decision will cause sleepless nights at a channel dependent on maintaining its subscriber base.