Virgin Media blames TV rights auction for rising Sky Sports prices
Virgin Media is still trying to persuade Ofcom to change the way Premier League TV rights are auctioned in the UK. The company filed a complaint with the regulator last September, complaining that the current system -- a limited number of match "bundles" which broadcasters bid for every few years -- is leading to higher prices for the consumer. Ofcom said it would look into the matter, but failed to draw any conclusions before the most recent TV rights auction finished earlier this year. The rivalry between Sky and BT meant that bidding increased to a record £5.1 billion -- £4.2 billion of which was spent by Sky. Now, Virgin Media is telling its TV customers that they'll soon need to pay more for Sky Sports and Sky Movies. From June 1st, these extras will go up by £2 per month and 50p per month respectively, due to increases in the amounts Sky is charging Virgin Media.
Normally, any price rise would paint Virgin Media as the villain, but here, the company is using the decision as ammunition against Sky and the Premier League. The argument being that if the auctions were set up differently, these increases could be avoided: broadcasters wouldn't need to bid so much, and more companies would have access to live TV broadcasting. The knock-on effect would be cheaper wholesale prices between broadcasters and cheaper subscriptions for viewers. In short, Virgin Media is saying that it doesn't want to increase its prices, but with the current setup its hands are tied.
Sky's response? Yes, its wholesale costs have changed, but Virgin Media ultimately sets the price for its own customers. A Sky spokesperson said: "This year we'll bring customers even more of the TV and movies they want to watch as well as an unrivalled choice of top quality sport. How much Virgin choose to charge their customers for this is up to them."
Ofcom is still looking into the matter, and says it could enforce changes retroactively for the most recent Premier League auction. The latest bidding takes effect from the 2016/17 season, so there's still time for the regulator to step in, should it find reason to do so.
[Image Credit: AP Photo/Jon Super]
