Regulator to assess Sky Sports wholesale mandate

Ofcom has launched a consultation to look at whether regulation that requires Sky to offer its premium Sky Sports 1 and Sky Sports 2 channels to other pay TV providers “remains appropriate”.

UK satcaster Sky has been obliged since 2010 to wholesale its main sports channels to rivals including BT and Virgin Media at prices set by Ofcom, though the UK broadcast regulator said there has been “significant developments in the market” since then.

These include the wider availability of sports content on competing retail services, the emergence of more ‘over-the-top’ content providers and pay TV devices, and BT’s acquisition of key sports rights.

“Ofcom’s assessment indicates that Premier League and Champions League football are key content likely to be capable of influencing consumers’ choice of pay TV retailer. Therefore, Ofcom is consulting on its view that limited distribution of this content may harm competition between pay TV retailers,” said the regulator.

Sky currently has around 75% of live rights to Premier League football with BT holding the rest of these rights, though BT has also acquired all live rights to Champions League football from next season.

“The content Sky has is likely to influence the purchasing decisions of a sizeable proportion of high-value customers. Retailers that do not have access to this content would find it more difficult to compete for these customers,” said Ofcom.

“Given Sky’s continued strong market position, Ofcom is seeking views on its assessment that if there was limited distribution by Sky of its key sports content, competition between pay TV retailers may be harmed. Ofcom is also seeking views on whether, given its market position, Sky may have incentives to limit distribution of its key sports content.”

The consultation, published today, is part of Ofcom’s review of the pay TV ‘wholesale must-offer’ remedy. Ofcom will now consider responses to the consultation and launch a second phase of the review next year.