Swisscom is the latest European pay TV operator being investigated over distribution of live sports following indications that, through its relationship with sports rights group Cinetrade, it may have abused its position in the market.
The issue is that Swisscom has a 49-percent stake in Zurich based Cinetrade, which operates as a content trading company for the purchase and commercialization of program, film and sports rights both as a wholesaler and retailer. It operates cinemas as well as its own platform for subscription television with a pay-TV offer including Video On Demand and a sports pay-per-view service. The focus of the current investigation is over whether Swisscom’s stake in Cinetrade has caused it to be biased against rival operators in making premium sports available.
The enquiry by regulator COMCO will examine whether Cinetrade has discriminated against certain TV platform operators by distributing its Teleclub pay TV service to Swisscom on more favorable terms than those offered to competitors. It will also consider whether the bundling of Teleclub’s sports channels with a basic package that subscribers are forced to take in order to access the sports content accords with the country’s competition law.
The concern does not appear to be over Cinetrade’s grip over premium sporting rights especially football, because that would have surfaced earlier. It was in 2011 when the Swiss Football League awarded a five-year contract jointly to Swisscom and Cinetrade for SFr 30 million (€26 million) a year, covering rights to the Axpo Super League and Challenge League for the five seasons starting 2012/13. At the time, the Swiss cable TV industry complained about the award of the rights but no action was taken then.
The issue of sports rights came up in a similar context in the UK over English Premium League football a few years ago. Sky owned most of the rights but was also a distributor as pay-TV operator BSkyB, leading to regulatory intervention by regulator Ofcom. This culminated in the ruling in March 2010 that Sky’s two premium sports channels should be made available to rivals, which at the time included just Virgin Media and BT Vision, at wholesale prices set by Ofcom.