Pay TV phase three document - Stakeholders - Ofcom

Pay TV phase three document – non-confidential version
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� We engaged Value Partners to carry out a review of the background to and
effects of wholesale must-offer obligations in other major communications
markets, to inform our further analysis of the appropriateness of such a remedy.
Value Partners’ final report is included here at Annex 11, and discussed in
section 8.
External factors
2.51 One important event since the last document is that the FAPL has held the auction
for the live rights to that competition for the 2010/11 to 2012/2013 seasons. The
outcome of this was a material change relative to the previous auction in 2006, both
in terms of the outcome of the auction, and the subsequent impact on the market.
2.52 In the previous auction Sky won four of the six live packages, with Setanta winning
the other two. Setanta’s access to this content allowed it to build a significant
subscriber base, on several different platforms, both as a wholesaler and as a retailer
in its own right. As of September 2008, Setanta had a retail subscriber base totalling
[ � ] ([ � ] on satellite and [ � ] on DTT) and a further [ � ] wholesale subscribers
on both cable and DTT.
2.53 The outcome of the February 2009 auction was that Sky won the rights to five of the
six available packages, which is the maximum available to a single bidder. Setanta
won the rights to the remaining package, generally recognised to be the least
attractive, with the largest number of fourth pick matches.
2.54 Since February 2009, Setanta’s future has become increasingly uncertain,
culminating in the days before publication of this document in it losing its FAPL rights
and going into administration.
� On 19 June 2009 the FAPL announced that Setanta had been unable to meet its
financial obligations, and that the existing licence agreement between FAPL and
Setanta had therefore been terminated, with immediate effect.
� The FAPL further announced its intention to auction the live rights which had
been held by Setanta to show the 46 UK live matches for the 2009/10 season. Of
these, Sky is precluded by the FAPL’s commitments to the European
Commission from winning both packs of 23 matches.
� On 22 June the FAPL announced that ESPN had won the rights to both packs of
matches that Setanta had previously licensed for the 2009/10 season, and the
one pack that Setanta had licensed for the 2010/11 to 2012/13 seasons 16 . At the
same time ESPN announced that it had agreed a wholesale deal with Sky for
distribution on Sky’s DSat platform. ESPN also said that it intended to make its
channel including FAPL coverage “widely available across multiple pay-TV
platforms”. At the time of writing, no other details of the availability of this channel
across platforms other than Sky’s are available.
� Following this, it was announced on 23 June that Setanta had gone into
administration 17 .
16 http://www.guardian.co.uk/media/2009/jun/22/espn-wins-premier-league-rights
17 http://www.guardian.co.uk/media/2009/jun/23/setanta-goes-into-administration