Premiere League auction under way

An auction that’s expected to raise £2 billion ($3.2 billion) for the rights to Blighty’s most popular sports event, live Premier League soccer, got under way Thursday.

Some of the world’s most powerful media groups, including News Corp.-controlled satcaster BSkyB and newly merged U.K. cable giant NTL, delivered sealed bids to the league’s London HQ for a three-year contract that kicks off in 2007.

At stake are the rights to 138 matches divided into six packages each containing 23 games — and, arguably, the future of Blighty’s pay TV market.

The betting is that BSkyB, facing competition from NTL and emerging new-media services such as British Telecom’s planned video-on-demand operation, will retain the lion’s share of the rights.

European Commission has attempted to end BSkyB’s monopoly on live Premier League coverage, which it has held since 1992.

The last auction, in 2003, raised £1.6 billion ($2.7 billion), of which BSkyB paid $1.74 billion. But the figure is expected to be almost double this time round when overseas rights, highlights and mobile deals are factored in.

Soccer, a national obsession for the Brits, has been the key driver of BSkyB’s business.

Today it is arguably even more important since DVD and other digital technologies like broadband and VOD have taken some of the steam out of the market for pay TV movies.

All the bidders were tightlipped as they made their final bids, but most observers reckon that BSkyB will end up with four of the six packages, with Irish group Setanta, which runs sports services for ex-pats in the U.S., getting some of the action.

One potential threat to BSkyB is NTL, soon to be rebranded as Virgin TV following the cable group’s recent purchase of Virgin Mobile.

BSkyB fears a rebranded NTL because of the Virgin brand’s popularity with people under 35.

It is understood that NTL will bid for at least half of the games.

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