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UK: Brussels Concerned by BSkyB Monopoly

by Daniel Dombey and Matthew GarrahanFinancial Times
October 1st, 2003

Mario Monti, Europe's competition Commissioner, on Wednesday turned his sights on British Sky Broadcasting, when he revealed plans to put forward a fresh set of objections to the satellite broadcaster's 1.02bn contract with English football's Premier League.

"The announcements so far made by the Premier League suggest that BSkyB will have an even greater monopoly over live television rights than was the case in the past," Mr Monti said. "This is bad for competition on broadcasting markets, and is bad for consumers."

The Commission has long been concerned at BSkyB's grip on the UK pay-TV market, achieved through screening a mixture of live football and recent films.

BSkyB declined to comment on Mr Monti's remarks. However, if the Commission forces the Premier League to change the structure of the rights on offer and deprive BSkyB of its exclusivity, the pay-TV group will lower its offer by several hundred million pounds.

Such a move could chaos among England's top football clubs. Many have already budgeted for the next three years on the assumption that the 1.02bn would be paid in full.

Mr Monti said the Commission would set out its concerns to the "parties involved" and give them an opportunity to comment.

This would involve sending out an additional set of charges to the formal "statement of objections" the Commission passed to the Premier League last December.

While that document emphasised the Commission's problems with the joint selling procedures of premier league clubs, the new statement will deal with the Brussels authority's distress at the outcome, in which BSkyB won all the live rights in four separate auctions last August.

It will also incorporate the results of a questionnaire sent out to other affected parties, new evidence the Commisison believes strengthens its case.

The fresh set of charges is also likely to delay a final decision, pushing it perilously close to the August start date for the three-year contract between the League and BSkyB.

Companies generally have two months to respond to Commission charges, and it takes several more months to take a formal decision.

The Premier League said it had "noted" Mr Monti's comments. "The Commission has yet to officially inform us of its position...once it does we will review any concerns they may have," it said.

"The packaging of our live rights entirely mirrors one of the Commission's own proposals to remedy its concerns and create the conditions for competition," it added. "We then awarded rights packages to those who won them in a transparent, fair and competitive process."





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