Pay TV phase three document - Stakeholders - Ofcom

Pay TV phase three document – non-confidential version
important to consumers, there are numerous other sports events on TV that are also
important to consumers – many of which are broadcast live on FTA TV.
4.241 FAPL argued 186 that we are wrong to suggest that the highly valued popular sports
on FTA TV tend to be relatively short one-off events, giving examples of a range of
events that are neither short nor one-off, such as Formula 1, FA Cup, rugby Six
Nations and the UEFA Champions League.
4.242 BT 187 , Virgin Media 188 , Top Up TV and Setanta 189 pointed out that although live FAPL
is very important, other non-FAPL sports are also important in making Sky Sports
channels “must stock” channels for pay TV retailers.
Our current view
4.243 When assessing evidence of retail demand side substitution the evidence we
presented on the indirect wholesale constraint such as consumers preferences,
product characteristics and the constraint from FTA remains relevant.
4.244 We recognise that FTA TV broadcasts important football, golf, rugby union, and
rugby league. However FTA cannot match the regularity and quantity of sport found
on premium sports channels. We therefore think it is unlikely that FTA would be a
sufficient constraint on a retailer of these premium sports channels. As with our
assessment of wholesale markets we acknowledge that the availability of some
specific highly valued sports on FTA TV might act as a strong out of market
constraint on a monopolist retailer of premium sports channels.
4.245 We have assessed whether Setanta Sports 1 is likely to be within the same retail
market as packages that contain Sky Sports 1. In paragraph 4.120 we considered
that our assessment of characteristics and preferences indicated that Sky Sports 1
was in the same wholesale market as Setanta Sports 1. This was because Setanta
Sports 1 contained a significant amount of highly valued sport that is a close
substitute for Sky Sports 1 (namely live FAPL). For the same reason we consider that
packages containing Setanta Sports 1 are likely to be within the same retail market
as packages containing Sky Sports 1 190 . Similarly we consider that packages
containing Sky Sports 2 are the same retail market.
186 FAPL response to Ofcom’s First Pay TV consultation paragraph 7.35.
187 BT response to Ofcom’s First Pay TV consultation paragraphs 6.7-6.9.
188 Virgin Media response to Ofcom’s First Pay TV consultation paragraph 5.14
189 Top Up TV and Setanta joint response to Ofcom’s First Pay TV consultation paragraphs 2.6-2.15.
190 Setanta went into administration on 23 June 2009, shortly after the live FAPL rights which had
been held by Setanta were awarded to ESPN. ESPN has announced that it has agreed a wholesale
deal with Sky for distribution on Sky’s DSat platform. It has also announced an intention to make its
channel including FAPL coverage ‘widely available across multiple pay-TV platforms’, although at the
time of writing no other details of availability across platforms other than Sky’s have been announced.
Our subsequent conclusions are likely to be independent of whether Setanta Sports 1, or some other
channel provided by ESPN, exists as part of the Core Premium Sports market.
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