Thread: General ESPN, BT, Euro, Premier and Sky Sports news
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Old 10-01-2014, 13:54   #4163
OLD BOY
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Re: ESPN, BT, Euro, Premier and Sky Sports news
Quote:
Originally Posted by johnathome View Post
Two companies colluding on prices? I think the regulator would hand out big fines if that happened.
It wouldn't be 'collusion', it would be a joint bid.

---------- Post added at 12:54 ---------- Previous post was at 12:49 ----------

Quote:
Originally Posted by 1andrew1 View Post
The whole idea of holding auctions, which is what most sports rights sales are, is to drive up prices, not drive them down.

Market competition that drives prices down occurs when two products or services can easily be substituted for one another eg petrol from Esso or Shell. However, this is not the case in sports rights as they are sold on an exclusive basis so offerings from Sky, Eurosport and BT Sport are not easy to substitute for each other.

However, if BT acquires more Premiership rights in the next auction, then it may become more easy for more people to substitute BT Sport for Sky Sports and price competition may then occur.
Yes, Andrew, you are right. However, prices cannot go much higher owing to customer resistance, and an auction can only produce bids that people are prepared to make. In the end, if Sky and BT get together and make a bid at a lower level, this will be good for everyone.
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