BSkyB and Ofcom have reached agreement at the Competition Appeal Tribunal (CAT), which while giving Sky the protection it sought, puts the wheels in motion for wholesale pricing of its premium sports channels.
Under the terms of the proposed order, Ofcom’s Wholesale Must Offer (WMO) obligation will only apply in respect of BT, Top-Up TV and Virgin Media. The three, whose original complaint lead to Ofcom’s investigation into the pay-TV market, will pay the ratecard price for Sky Sports and/or Sky Sports 2. The difference between that and the relevant WMO price would be held in an escrow account. At the end of the appeal CAT will determine how the monies held in escrow should be distributed.
Under Ofcom’s WMO, the regulator has set a wholesale price of £10.63 (€11.90) per subscriber per month when sold on a standalone basis. This would reduce the price by 23.4% below the current wholesale price to cable operators. The bundle of Sky Sports 1 and 2 favoured by the majority of customers has been reduced by 10.5% to £17.14.
“We are pleased to have been able to put forward an agreement which provides substantial protection against the short-term impacts of Ofcom’s decision. We remain fully focused on our substantive appeal, which will be filed with the CAT in due course,” said a Sky spokesman. Earlier today (Thursday) Sky chief executive Jeremy Darroch confirmed the satcaster’s intention to launch a full appeal against the Ofcom decision.
Sky’s effective concession follows several days of discussion at CAT, which began last Friday, and many observers thought would be over within the day. While Virgin Media already carries the Sky Sports channels – even if the cablenet argues it does so at a loss – BT and Top Up TV must now decide if they want to pursue the transmission of the channels ahead of Sky’s appeal.