OFT caught offside in challenge to Premier League TV contract

Any other business acting this way would be subject to competition law and I see no reason why the selling of sports coverage should be treated any differently.”

These were the words of John Bridgeman, Director General of Fair Trading, three years ago, when he referred football’s Premier League to the Restrictive Practices Court. His view that the League was acting illegally when it negotiated TV rights to its matches, rather than letting each Premiership club strike separate deals, was greeted with astonishment by the sports and broadcasting communities.

How could it be wrong for the organisers of a sporting competition to sell the TV rights exclusively to one broadcaster? Rick Parry, then chief executive of the Premier League, spoke for many when he said the implications for the whole of sport would be unthinkable if the Premiership lost the case.

“If no governing body is able to negotiate directly with broadcasters, then deals would have to lie with the most successful clubs, or even individual players in sports such as golf and tennis,” he said. “The result would be chaos, farce and fragmentation – hardly a recipe for the future well-being of British sport.”

Three years on, barring a last-minute reconciliation, Bridgeman’s view is finally to be tested in the courts – at a likely cost of between 20m and 30m. Some would say this money – the combined legal costs of the OFT, the Premier League and the two broadcasters with which it has contracts, BSkyB and the BBC – could be better spent. It would certainly cover the costs of a few coaches or commentators, or boost the Premier League’s grassroots football fund.

One expert witness lined up by the Premier League says the OFT’s case might have been “devised by Lewis Carroll on a malign day”. The logical extension of its argument – that each club should be free to sell its home matches individually, to whichever broadcaster they choose – would be an Olympic men’s 100 metres final in which each runner would sell the rights to his own personal performance individually, with no broadcaster allowed to show the whole race.

By acting jointly to sell broadcasting rights to their contests, the athletes (or football clubs, or other sporting competitors) are deemed to constitute a cartel, and in the OFT’s view this is against the public interest, for “the net effect of cartels is to inflate costs and prices”.

Yet the OFT insists it is acting in the best interests of viewers and football fans. It claims there is unsatisfied consumer demand for TV coverage of live Premiership matches because only 60 out of 380 games each season are broadcast live on BSkyB. (The word “only” is the OFT’s.) It says the BBC broadcasts highlights of only three games, plus the goals from other games, on Match of the Day.

“The restriction in supply means that prices can be maintained at higher levels than would be the case in a competitive environment,” says the OFT. In other words, if other TV companies were able to show live coverage of Premiership matches, the cost to the broadcaster (and, by implication, to the viewer) would come down. The OFT denies chaos will ensue if it wins its case or that it is trying to tell the Premier League how to organise its matches. It maintains it merely wants to change the way the clubs sell broadcasting rights.

But that’s the fundamental issue – for these days TV dictates not just the way sports contests are organised but which clubs or competitors take part. The Premier League says that at present all 20 of its clubs get a fair share of the TV money and coverage. It claims if the broadcasters are made to deal with clubs directly, they will pick off the top dozen and ignore the rest, leading to a breakaway “super league”.

“If this case is lost, you will be creating eight to ten super-rich clubs,” says the League’s spokesman Mike Lee. “The gap between them and the others will become unbridgeable – and that could fatally undermine the competitive nature of the Premier League.”

BSkyB and the BBC both support the Premier League’s case. Chief executive of BBC Broadcast Will Wyatt says Match of the Day – which provides a comprehensive review of the Premier League’s matches – depends on the BBC being able to get the rights to all the matches. “Insisting clubs sell their rights individually would not only make providing a comprehensive programme impossible but would, in reality, merely benefit the larger clubs at the expense of the rest,” he says. “Currently, we broadcast extended highlights coverage of each club at least three times every season – as well as all the goals and key incidents of that Saturday’s matches.”

But the OFT disagrees. “Under the present arrangements,” it says, “the fans of particular clubs have less chance to see their own team perform. There is also less chance for new and exciting forms of broadcasting to develop, such as new regionally or locally focused programmes, or channels covering matches of local clubs.”

That raises the question whether viewers really want to watch (and will pay for) local matches, rather than the top games (and glosses over the fact that Sky and ITV also cover the lower divisions of the Football League).

The irony is that while the legal wheels have been slowly grinding, changes in technology have meant the OFT’s concerns are likely to be answered as a matter of course. The Premier League has already said its next TV contracts, due to begin in 2001, will be on a very different basis from the current ones. It has promised they will be “platform universal” – so top matches will be available on terrestrial TV, cable, satellite and digital channels.

That should provide more than enough matches for even the most ardent fan.

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