Sky and BT Accused of Overcharging Consumers for Premier League Broadcasting Rights

Strategic Insights -

The Premier League's broadcasting rights auction, dominated by Sky and BT, has been criticized for unfairly burdening consumers with high costs. Virgin Media chief executive Tom Mockridge has accused the two companies of overcharging, arguing that the exclusive rights deal has led to UK football fans paying twice as much as their European counterparts to watch half the games. The blind auction process has resulted in a 71% increase in prices over the past two deals, with Sky paying over £11m per fixture and BT paying £7.6m per game.

Key Takeaways:

  • The Premier League's broadcasting rights auction has resulted in a 71% increase in prices over the past two deals, with Sky and BT paying £5.1bn to broadcast 504 matches between 2016 and 2019.
  • UK football fans pay twice as much as fans in Europe to watch half the games, with all live games available in Germany, France, Spain, and Italy at a lower price.
  • The exclusive rights deal has led to a worrying decline in original content produced in the UK, with a Deloitte report stating that the soaring sums spent on sports broadcasting are "hollowing out" the creative side of television programming.
  • Virgin Media has called for a greater supply of matches at auction, bringing down the cost of each one, and has criticized the fact that Premier League matches are broadcast exclusively on one network, with none available on free-to-air channels.
  • The Richard Branson-branded telecoms group has asked Ofcom, the communications regulator, to examine the way the blind auction for the Premier League live broadcasting rights is conducted.
  • The Premier League's control of the auction process has been criticized for not justifying an exemption from usual competition law rules that protect consumers.
  • The high cost of sports broadcasting has had a ripple effect on the industry, impacts not just football fans, but also lovers of British drama and comedy, who are also seeing a decline in original content.

Statistics:

  • The cost of broadcasting Premier League matches has tripled over the previous two auctions, from £1.7bn to £5.1bn.
  • Sky will pay over £11m per fixture over the three-year period, while BT will pay £7.6m per game.
  • The number of live games available on TV in the UK is less than half, at around 220 games, compared to European countries where all live games are available.

Sources:

  • The Daily Telegraph
  • Deloitte report (March 2023)
  • Ofcom (regulatory body)
  • Virgin Media