Pub operators urge Sky not to hike prices following £2.2bn TV football deal

By Adam Pescod

- Last updated on GMT

Related tags: Chief executive, Price, Premier league

Football deal: Sky is now forking out more than double the amount it paid for Premier League broadcast rights in 2004
Football deal: Sky is now forking out more than double the amount it paid for Premier League broadcast rights in 2004
Leading pub operators are urging Sky not to raise prices following its £2.2bn acquisition of live Premier League football rights from 2013/14.

As part of the £3bn total package of rights, telecoms giant BT also paid £738m, which will allow it to screen 38 matches per season from 2013/14.

The staggering increase in the price paid for broadcasting rights has triggered fears among operators and trade bodies that pubs will have to foot the bill.

Sky is believed to have paid about 40% more than the last time it purchased the rights. However, Jeremy Darroch, Sky’s chief executive, said: “Whilst the cost is higher, we have capacity for this increase through the combination of excellent work on cost efficiency across the business and choices over other future spending.”

An announcement on pricing for next season is expected in the near future.

Two leading multiple pub operators signalled their intention to remove Sky from their venues should the cost of the latest deal be passed on to pubs.

“We will take it out, it’s as simple as that,” said Alex Salussolia, managing director of Glendola Leisure, which runs 17 sites. “We don’t run our business on Sky Sports — it is nice to have. However, when it becomes commercially unviable, we’ll stop it.”

Paul Wigham, chief executive of All Our Bars, said: “I hope Sky pushes some of this [cost] on to domestic customers as pubs don’t really get a fair share of it at the moment.

"Sky is a big driver in 10 of our pubs. However, a third of our estate with Sky would have to lose it if the prices went up because the effect is only marginal for them.”

Meanwhile, Philip Cutter, licensee of award-winning sports pub the Murderers in Norwich, believes he will have to reconsider his deal with Sky if prices go up.

“At the moment we are paying £2,502 per month,” he said. “To pay consider-ably more would mean we’d assess whether it is viable to do so.”

The British Beer & Pub Association (BBPA) and Association of Licensed Multiple Retailers (ALMR) will meet Sky in the coming weeks to urge the broadcasting giant to introduce a competitive pricing policy that doesn’t punish pubs.

BBPA chief executive Brigid Simmonds said: “With so much more paid for broadcast rights than last time, this deal must not
lead to a huge increase in prices for pubs.”

Kate Nicholls, the ALMR’s strategic affairs director, said pubs got a bad deal from the last auction process in 2009 as prices were hiked across the board.

“We have just witnessed a fantastic season, with a thrilling climax to it, and pubs once again proved to be the natural home of live sport. Let’s not ruin it with sky-high price hikes,” she said.

Research from the ALMR shows that, after price increases following the last rights auction, Sky Sports subscriptions fell to their lowest level in a decade — with 39% of pubs taking the service.

Related topics: Other operators

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