Court backs Premiership football deal

A REVOLUTION in the way Premier League football is broadcast on television was averted yesterday when a court ruled that an exclusive deal with BSkyB was not illegal and not against the public interests.

The surprise decision will have wide-ranging repercussions throughout the highly lucrative world of televised sport. Mr Justice Ferris, sitting at the Restrictive Practices Court, said that although the pounds 743mdeal, which also includes the BBC, did lead to restrictions for the public's viewing of football, the disadvantages were outweighed by the benefits.

The Office of Fair Trading, which had brought the action claiming that the 20 Premiership clubs were operating an unlawful cartel by negotiating a collective deal, said it is considering an appeal. The Director of the OFT, John Bridgeman, said the case, which cost pounds 30m, was "useful groundwork for the future".

BSkyB, BBC and the Premier League said the court had vindicated their positions. The satellite channel said it would not be introducing inter- active sports coverage next year. Overall, however, the big clubs lost out financially by the decision. Had the OFT won its case the clubs would have been able, individually, to sell their rights for their matches to broadcasters.

Manchester United's shares rose 3.5p, less than analysts believed they would have if the decision had gone the other way. Shares in BSkyB rose 16p to pounds 5.82. The Premier League's contract with BSkyB and BBC is due for renewal in 2001. With the legal parameters now set, television companies are expected to start negotiating with the league for the acquisition of rights after that. Mr Justice Ferris said the clubs had effectively accepted restrictive practices by negotiating as a body through the Premier League. And the exclusive agreements with BSkyB and the BBC - which shows recorded highlights on Match of the Day - also involved similar restrictions.

But to outlaw the arrangement on those grounds would rob the public of substantial benefits, he said. The ability of the Premier League to sell TV rights in its championship as a whole would be jeopardised, and the clubs would suffer a substantial loss of revenue and would be unable to improve the quality of their stadia and other facilities or improve the quality of their playing squads.

The judge also held that nullifying the contract would mean the Premier League would lose its ability to distribute the money from television among all the clubs and the competitive balance would be "lost or seriously diminished". Premier League spokesman, Mike Lee, said they were "delighted" with the ruling. "It is a great victory for the whole of English football. All the major arguments of the OFT have been rejected by the court," he said.

Sky chief executive and managing director, Tony Ball, said it was "a victory for commonsense". He added: "We are delighted by this outcome. Sky has always felt the OFT has misunderstood the British broadcasting market and Sky's role in it."

The case for the existing contract was backed by evidence from the Government's Football Task Force and an extensive list of soccer managers, chairmen, fans and journalists. Task force chairman, David Mellor, said it would be impossible to get the top clubs to give up some of their TV revenue to the lower reaches of the game if they were allowed to negotiate their own deals.

The Football Supporters Association welcomed the decision, but also called for an independent regulator for the game. FSA national committee member, Kevin Miles, said: "Fans still have little confidence in bodies like the Premier League safeguarding the interests of football. This case once again has highlighted the need for some independent regulation to safeguard the future of the game.

"One potential disaster has been averted. An end to the collective negotiation would have led to a free-for-all and further widened the gap between rich and poor clubs. However, the status quo which has been allowed to prevail, is far from ideal." The ruling means there will be no rush of cable, satellite and digital television companies seeking to tie up deals with individual football teams.