Sky Vodafone merger will entrench sports monopoly, says Spark

Spark has made a submission to the Commerce Commission formally opposing the proposed merger between Sky and Vodafone on the grounds that Sky’s monopoly of rights to premium sports will limit access to these events.

Spark’s general manager regulation, John Wesley-Smith, said: “Given Kiwis’ love of these sports, they are ‘must have’ rights for media content providers. As it stands right now, there isn’t a proper wholesale market for access to premium sports, and as a result New Zealanders have very few options for how they access that content.”

He said Spark’s concerns were based on the limited, unattractive wholesale options currently offered by Sky, which had changed little since Spark had walked away from a reselling deal with Sky three years ago because it did not consider the deal commercially viable.

“Sky's current wholesale arrangements are essentially about reselling Sky boxes. We’re not interested in being tied to this outdated distribution model as it doesn’t work for our customers who want better choices that let them watch their sports whenever and wherever they want to.”

He added: “Sky's business model seems increasingly focused around sports, which underlines how effective their monopoly is in this space. The proposed merger with Vodafone is likely to entrench that monopoly, and that's something all New Zealanders should be concerned about.

“We believe if the Commerce Commission blocked the proposed merger, Sky would be forced by commercial realities to make all of its sports content available online and on-demand – and via wholesale arrangements with lots of parties that help distribute this content to New Zealand consumers,” Wesley- Smith said.

“By making premium sports content available to more New Zealanders in more ways, through a viable and credible wholesale market, consumers will be better served – and the market will grow for Sky’s content rights. That is not going to happen if the merger goes ahead in its current form without such a wholesale market. A merged Sky/Vodafone will be able to leverage its monopoly power in the sports market, to the detriment of consumers.”

Copyright © 2016 IDG Communications, Inc.

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