Berenberg analysts Sarah Simon, Robert Berg and Jessica Pok argue that while the investigation could have a positive impact for Sky by delaying an auction, scheduled for the first quarter of next year, where it will face intense competition from BT, Sky is likely to be in “a weaker position” in relation to Premier League rights as a result of the investigation and other pressures.
“The investigation by Ofcom may mean that the auction of the rights is delayed, although the Premier League may choose to go ahead anyway. If Ofcom finds the process to be in breach, however, that would mean running another auction under new terms. If, on the other hand, Ofcom does not find competition issues, then the auction results could stand,” said Berenberg.
The analysts argue that a greater supply of matches could lead to more competition for Sky in football, potentially reducing its appeal to subscribers. Alternatively, if Sky buys more matches, this will come at an increased cost.
Berenberg estimates that Sky may have to pay about 60% more for the same number of matches it currently has in any case as a result of the auction.
Berenberg’s analysis holds that the cost of rights are currently cheap relative to other markets, while the high price to subscribers reflects the fact that they are forced to buy the basic package from Sky before gaining access to Premier League matches, while the wholesale cost is based on the retail price of the combined package.
The Ofcom investigation follows a complaint by Virgin media that the way rights are sold results in high prices for UK TV sport fans because relatively few matches are sold in the UK compared with other markets.
Telia Norway to cut headcount following Get acquisition. digitaltveurope.com/2019/05/22/tel…
22nd May 2019