Sky is increasing the price of its TV subscriptions. The network is going to raise average customer fees by more than £2.50 a month, the Financial Times reports. The move comes just weeks after it paid £4.2 billion for rights to air Premier League football matches. It is likely that BT, which also has a portion of the Premier League match rights, will follow suit down the line.
The pay-for TV service offers a “Sport bundle,” which is going up by £1 a month to £47 (a 2% increase). The Family bundle, meanwhile, will cost an extra £3 per month to £36 (a 9% increase). There is no football in the family package, so it appears that even Sky subscribers who are not interested in football will be paying the Premier League’s bill.
The FT says that the price rises will come into effect on June 1.
The price change is out of season for Sky. Usually, it increases its prices around September. The FT says explicitly that the company is trying to claw back some of the billions it paid to get some of English football’s top matches. Sky managed to succeed in obtaining the maximum number of match rights. It fought off an increasingly aggressive BT, which is slowly eating away at Sky’s share of the spoils. BT paid £960 million for two of the seven TV packages available. Sky got the other five.
The total £5.136 billion paid by the companies was a record sum — 71% more than the last auction in 2012. Sky paid 83% above what it did three years ago; BT 18% more, but garnered four additional fixtures to its roster, taking last year’s 38 to 42 for the coming season, the BBC reports. Sky has 126 games.
But Sky had to pay around £300 million more to secure its Premier League matches. It is clearly now reacting to the inflated costs. The FT notes that the company is also making cuts internally, such as changing call centres to online help desks. Analysts actually believe Sky loses money on its sports deals but makes money back through its other entertainment packages.
According to the FT, Virgin Media, a rival in the media industry, competing in TV, internet service, and a mobile network, will complain to communications regulator Ofcom that the public is paying too much to watch Premier League football.
Right now BT is not raising prices. It also offers its high-speed broadband customers free viewing online to its sports channels, including BT Sport. In addition, next season BT has managed to get the exclusive rights to the Champions League.
BT’s “free” football is likely to be temporary. BT chief John Petter was asked at a recent conference in London whether his viewers would be charged more for football and he refused to be drawn — leaving everyone in the room to conclude that BT probably would charge more, at least for the Champions League, down the road.