UPDATE 2-BSkyB wins appeal on sports channel prices

Wed Aug 8, 2012 1:57pm EDT

By Karolin Schaps

LONDON Aug 8 (Reuters) - British satellite broadcaster BSkyB won a long-standing dispute over the price it can charge rivals for its sports content after Britain's Competition Appeal Tribunal (CAT) ruled in the company's favour on Wednesday.

The dispute dates back to 2010 when media regulator Ofcom ordered BSkyB to reduce the amount charged to competitors, such as Virgin Media and BT for its two most important SkySports channels in a move designed to increase market competition.

The price of a single channel was reduced by 23 percent to 10.63 pounds ($16.64) a month, and for both channels by 10.5 percent to 17.14 pounds.

Ofcom said it was "very surprised and disappointed" with the CAT's decision, which it believed was "not in the interests of consumers".

Ofcom said it would immediately consider what further steps it could take.

BSkyB said in a statement: "We welcome the CAT's confirmation that Ofcom's competition concerns in relation to the wholesale supply of Sky Sports are unfounded."

"This finding supports the argument that Sky has been making consistently over the last five years."

After BSkyB had appealed against the ruling, the difference between both sets of prices were paid into an escrow account by BT, Virgin Media and Top-UP TV, with the proceeds to be distributed after the case was resolved.

Analysts at Deutsche Bank estimated this week that the amount held in favour of Virgin Media, assuming the Ofcom decision was upheld, was about 19 million pounds.

Last week, Britain's Competition Commission said that BSkyB's strong position in movies did not adversely affect Britain's pay-TV market, a decision that was met by dismay by BT and Virgin Media.

Shares in BSkyB closed at 743 pence on Wednesday, valuing the group at around 12.35 billion pounds.

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