BSkyB scoops soccer rights

Premier League deal goes against EU regs

This article was updated at 5:00 p.m. PT on August 10, 2003.

BRUSSELS — England’s Premier League of top soccer teams has voted to defy European Union regulators and award the TV rights for live games to Rupert Murdoch’s satcaster BSkyB for £1.02 billion ($1.6 billion).

The EU had demanded that the rights be sold in separate packages after ruling that a single auction, the Premier League’s usual method of sale, stifled competition.

But if the EU intention was to drag the games away from BSkyB — which has become the territory’s dominant satcaster and the envy of terrestrial rivals on the back of its virtual monopoly of live soccer — it has failed.

The paybox announced Friday that it had bagged rights to the four most desirable packages. The deals will run for three years, starting with the 2004-05 season. This means BSkyB gets the right to pick first what games it will screen on Sunday afternoons; plus, it has second-, third- and fourth-choice games that it can show Monday evenings and Saturdays.

That adds up to 138 games, compared to 106 in the last few seasons.

BSkyB’s coverage of England’s top soccer league, whose 20 members include Manchester United and Arsenal, has helped the company attract more than 6 million subscribers and squeeze cable rivals NTL and Telewest while frustrating terrestrial rivals BBC and ITV.

It was also partially responsible for last year’s collapse of ITV Digital, a pay TV venture between Granada and Carlton Communications.

Although the price sounds exorbitant, BSkyB is actually paying 8% less than it did in June 2000 for more than twice as many games — the value of global sports rights has dropped as an advertising slump curbed spending by broadcasters.

Announcement will come as a relief to many in the game who feared the value of the rights would drop even more due to a downturn in the economic environment.

Blighty couch potatoes will have access to more live soccer than ever before — but only if they take out a subscription to BSkyB’s sports channels.

Those who do not want to fork over for Sky Sports will have to settle for the BBC’s highlights programs on Saturday and Sunday evenings. BBC grabbed the highlights rights for £105 million ($169 million) — a major coup for the pubcaster, which lost those rights to commercial rival ITV three years ago.

EU probing deal

However, the EU is still weighing the implications of the BSkyB deal. The day before its announcement, Brussels spokesman Tilman Lueder had again warned clubs that EU regulators wanted live matches to go to more than one broadcaster.

It has already successfully forced countries such as Germany to spread soccer rights more equally, and regulators will be asking for details of each of the Premier League auctions.

Lueder, spokesman for EU competition commissioner Mario Monti said, “We want more information to be sure that this was an open, fair and unconditional bidding process.

“It is better to have four packages than just one, but we remain to be convinced.”

Premier League chief exec Richard Scudamore believes BSkyB’s successful bids satisfy the EU’s requirement. The League hasn’t yet decided what to do about other rights packages, such as those for mobile phone and radio.

Complaint to be filed

However, Dermot Desmond, an Irish billionaire who owns stakes in soccer clubs including Celtic and Manchester United, is preparing to lodge formal complaints about the rights auctions with the Office of Fair Trading and the European Commission, the EU’s executive arm.

Shares of BSkyB, which has held the Premier League contract since 1992, rose 4.2%, to $1,149. They’ve climbed 11.5% this year.

(Bobbie Whiteman in Hollywood and Bloomberg News contributed to this report.)