Competition Act investigation into the sale of live UK audio-visual media rights to Premier League matches.

CW/01138/09/14

Complainant: Virgin Media Limited (‘Virgin’)
Complaint against: The Football Association Premier League Limited (‘PL’)
Case opened: 18 November 2014
Issue: Whether the object or effect (actual or potential) of the joint selling arrangements of the PL for live UK audio-visual media rights to Premier League matches is the restriction or distortion of competition in the UK and/or the European Union in breach of the Chapter I prohibition of the Competition Act 1998 (‘the Act’) and/or Article 101(1) of the Treaty on the Functioning of the European Union (‘TFEU’).
Relevant instrument: The Chapter I prohibition of the Competition Act 1998 (‘the Act’) and Article 101 of the Treaty on the Functioning of the European Union (‘TFEU’).

Update note: 23 March 2015

Ofcom is updating on progress of its investigation into how the Premier League sells live UK audio-visual media rights for Premier League football matches.

Ofcom provided the Premier League on Friday 20 March with a case update, responding to a request for more detail on Ofcom’s assessment and analysis to date, in advance of a further ‘state of play’ meeting.

The investigation continues to progress, involving further information gathering and new consumer research. No decisions have been reached at this stage.

Ofcom wants to further understand how consumers benefit from the way the Premier League sells its rights.

Ofcom has recently received consumer research from Virgin Media, which it is considering. Ofcom will also carry out new consumer research, which will canvas views of fans who attend matches and those who watch them on TV. It will look at the value viewers place on watching the Premier League. We will also be monitoring changes in retail prices of sports channels as the investigation progresses.

This will build on engagement with a wide range of interested parties. In particular, discussions have been held or written submissions sought from football bodies, football clubs, fans’ groups, broadcasters and policing organisations.

End of update note

Update note: 4 February 2015

In November 2014, following a complaint by Virgin Media, Ofcom opened an investigation under section 25 of the Competition Act 1998 into the joint selling arrangements by the Premier League for live, UK audio-visual media rights for Premier League football matches.

On 28 January 2015, Virgin Media made an application requesting that Ofcom issue an ‘interim measures direction’, pursuant to section 35 of the Competition Act, to require the Premier League to suspend the forthcoming auction of audiovisual rights to broadcast live Premier League matches, until Ofcom had reached the next stage of its process in March 2015. Ofcom received submissions from the Premier League on Virgin Media’s request.

Having considered the application, and submissions from Virgin Media and the Premier League, Ofcom has today decided to reject the application, as it does not consider that there is an urgent need to intervene to delay the auction. There will be a significant gap, of around 17 months, between the auction and the start of the 2016/2017 season when broadcasting of the relevant matches will commence. In the event that Ofcom’s investigation concludes that there is an infringement, Ofcom has the necessary powers to require the Premier League and Premier League clubs to make changes to arrangements for the broadcasting of matches within the time available before the start of the relevant season.

In its submissions to Ofcom, the Premier League has similarly stated its view that there is no basis for Virgin Media’s assertion that Ofcom would be constrained in its ability to intervene post auction. It has also confirmed to Ofcom that it will put in place arrangements in contracts with purchasers to address the consequences of a potential infringement decision.

The investigation is ongoing and will consider the potential harm to competition and consumers arising from joint selling under the auction.

Ofcom is carrying out the investigation expeditiously, in light of the auctioned matches being broadcast from August 2016. Ofcom still expects to publish a further document in March 2015.

End of update note

Update note: 12 January 2015

Ofcom held a state of play meeting with the Premier League in the week commencing 15 December 2014. Ofcom also met with the complainant, Virgin, and with interested parties BT Group plc and Sky Plc in the week commencing 5 January 2015.

The investigation is ongoing. We expect to publish a further update in March 2015.

End of update note

Update note: 10 December 2014

Ofcom has invited the Premier League to attend a state of play meeting in the week commencing 15 December 2014. Ofcom has also extended the invitation to any Premier League club member playing in the 2014/15 Premier League season that wishes to participate.

End of update note

Case opening

Ofcom has opened an investigation under section 25 of the Act into the joint selling arrangements by the PL for live UK audio-visual media rights for Premier League football matches.

Under section 25(2) and (3) of the Act, Ofcom may conduct an investigation where there are reasonable grounds for suspecting that there is an agreement which has as its object or effect the prevention, restriction or distortion of competition within the United Kingdom and/or the European Union.

Ofcom will consider whether there is a breach of the UK and/or EU competition law prohibition on agreements and decisions which restrict or distort competition.

Process

In the initial phase of the investigation, Ofcom expects to gather further information using its powers under the Act. The initial analysis of this information will help inform Ofcom’s view on whether and how to proceed further with the investigation.

This case is at an early stage and Ofcom has not reached a view as to whether there is sufficient evidence of an infringement of competition law for it to issue a statement of objections. Not all cases result in Ofcom issuing a statement of objections. As a result, it would not be appropriate at present to include any further estimates of the timing of any later investigative steps.

The complaint

The investigation follows a complaint from Virgin Media, which was submitted to Ofcom in September. Virgin Media’s complaint alleges that the arrangements for the ‘collective’ selling of live UK television rights by the PL for matches played by its member clubs is in breach of competition law.

Under the PL membership rules, which are an agreement between each of the Premier League clubs and the PL, the PL has authority to enter into contracts for the sale of rights to Premier League matches.

In particular, the complaint raises concerns about the number of Premier League matches for which live broadcasting rights are made available.

Virgin Media argues that the proportion of matches made available for live television broadcast under the current Premier League rights deals – at 41% – is lower than some other leading European leagues, where more matches are available for live television broadcast.

The complaint alleges that this contributes to higher prices for consumers of pay TV packages that include premium sport channels and for the pay TV retailers of premium sports channels.

The Premier League rights auction

Ofcom is mindful of the likely timing of the next auction of live UK audio-visual media rights, and is open to discussion with the Premier League about its plans.

Scheduling of live matches on TV

Ofcom understands that the scheduling of football games is important to many football fans, in particular attending 3pm kick-offs on Saturdays. The investigation will take this into account and Ofcom plans to approach the Football Supporters’ Federation and certain other supporters’ groups to understand their views.

Case Leader: Melanie Everitt
Case Reference: CW/01138/09/14
Case Team email: PLinvestigation@ofcom.org.uk