Pay TV phase three document - Stakeholders - Ofcom

Pay TV phase three document – non-confidential version
5.63 However, as explained above, we consider that our analysis of the Live FAPL Rights
is sufficient to conclude that entry and expansion will not materially undermine Sky’s
wholesale position. Moreover, if a third party were to acquire sufficient rights to live
FAPL matches, it might not need to acquire the rights to many other sporting
contests in order to impose a strong competitive constraint upon Sky’s Core Premium
Sports channels 300 .
5.64 Accordingly we have considered barriers to the acquisition of other live sports events
in less detail. However, we recognise that a new entrant could increase the
attractiveness of its channel(s), and thus the strength of the competitive constraint
that it exerts on Sky’s Core Premium Sports channels, by winning the rights to other
sports. In particular, the attractiveness of UEFA Champions League rights is
supported by the survey evidence set out in the Second Pay TV Consultation.
5.65 Sky Sports 1 and 2 feature live football, rugby union, rugby league, cricket, tennis
and golf. Figure 40 above sets out which broadcaster(s) currently hold the rights to
leading live events in these sports, as well as summarising the position in the
previous rights agreement and (where known) in any agreements to license these
rights in the future.
5.66 The pattern of broadcasters that have won these other live rights is less clear cut
than for the Live FAPL Rights and differs between sports. Sky has been fairly
successful when bidding for live football rights. Indeed in March 2008, Sky won the
rights to an increased number of Champions League matches 301 . However, both FTA
and other pay TV broadcasters have also successfully acquired the rights to a
number of attractive sporting events (e.g. Setanta and ITV jointly acquired the rights
to England international football matches and FA Cup matches) 302 . Sky has a strong
track record in winning all the available cricket rights. In contrast, for live golf, rugby
union and rugby league the pattern is mixed, with rights being won by the BBC,
Setanta and Sky. Compared to the other sports, Sky tends to win relatively fewer
rights to tennis tournaments.
5.67 Thus, based on the parties that have won sports rights recently, it is not clear that
there are particular obstacles to third parties such as the BBC, ITV or Setanta
acquiring the rights to live golf, rugby union, rugby league and (especially) tennis
matches. However, crucially in our view, the historical picture suggests that Sky is
more likely to be successful in retaining or acquiring live football and (especially)
cricket rights.
Countervailing buyer power
5.68 The only major independent purchaser of Sky Sports 1 and 2 is Virgin Media,
although a number of other parties have sought to retail these channels in recent
years. We have considered whether these actual and potential buyers are likely to
exert sufficient CBP to offset Sky’s seller power over the next three to four years.
300 Specifically, [ � ].
301 For the 2006/07 to 2008/09 competitions, ITV had the first and second pick of the Champions
League matches held on Tuesdays. Sky had the live rights to any remaining Tuesday matches and all
Wednesday matches. For the 2009/10 to 2011/12 Champions League competitions, Sky has added to
the number of live matches it will broadcast by winning the second pick Tuesday match from ITV.
302 As explained in paragraph 5.35 above, very few listed events are relevant to this analysis.
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