2degrees boss Mark Aue accuses Spark of indulging in the same competition quashing behaviour it complained about as it lobbied against the Sky TV-Vodafone merger. Photo / Supplied
2degrees boss Mark Aue accuses Spark of indulging in the same competition quashing behaviour it complained about as it lobbied against the Sky TV-Vodafone merger. Photo / Supplied
COMMENT:
Sky is poised to keep top-tier rugby rights with a new $400m Sanzaar deal, as first-flagged by the Herald.
But Spark has grabbed domestic cricket rights and can be expected to chase NRL, netball and other top sports rights as they come up over thenext 24 months.
The telco may be wary of political backlash if it pursues more rugby in the wake of its RWC wobbles. But everything else is on the table.
In a research note after Sky's shares crashed to a record low on Thursday after Spark's domestic cricket rights win, Morningstar Research analyst Brian Han highlighted the telco's "ominous aggression" in pursuing premium sports rights.
Han meant ominous for Sky, but expect Spark's rivals in the broadband industry to seize on the "aggression" factor differently.
In the run-up to the Rugby World Cup, 2degrees sent a letter to the Commerce Commission, complaining that Spark's promise of a fair wholesale deal - which would have let other internet providers resell Spark Sport, and for it to appear on Vodafone TV and other platforms - had evaporated.
"As an industry, we collectively invested millions of dollars to make sure the Rugby World Cup would stream smoothly - on the understanding we'd have a workable wholesale arrangement. Now you've got to wonder if there was ever genuine intent," 2degrees CEO Mark Aue told the Herald in follow-up comments.
Aue feared Spark could win the rights to more top-tier sport, then leverage its market power by offering it free to its own customers, but charging others. (New or upgrading Spark broadband and mobile customers got to see the Rugby World Cup free on certain plans).
"They're the only ones who can offer it for free. The World Cup could be a precursor to bigger sporting events where customers are locked in to Spark mobile plans," he said.
Today, 2degrees had no further comment. But it's notable that its sometime ally, competition lawyer Michael Wigley, has unloaded on Spark, using the telcos own words against it.
Spark can be expected to chase NRL, netball and other top sports rights as they come up over the next 24 months. Photo / Photosport
Wigley notes that when a Sky-Vodafone merger was on the table, Spark raised the concern that monopoly sports rights could be bundled with other products, leading to a "re-monopolisation of network services." Competition would go down, and prices go up.
Those very concerns apply to Spark Sport today, Wigley says. Expect 2degrees - and likely Vocus and possibly Vodafone - to pick up those arguments and run with them (Vocus did not immediately respond to a request for comment; Vodafone spokesman Richard Llewellyn said: "As an aggregator of content, we're always keen to partner with providers of great content to deliver the best possible experience for Kiwi viewers via Vodafone TV, as long as the commercial terms are right.")
Earlier, Vocus consumer GM Taryn Hamilton described Spark Sport's wholesale offer as too little, too late. The financial terms were "underwhelming" and there were "multiple restrictions." (Vocus is the owner of Orcon, Slingshot and Flip).
"This is pretty concerning behaviour given how much of a fuss Spark made about fair competition when objecting to the Vodafone and Sky merger," Hamilton said.
We've yet to see if the ComCom will spring into action (after 2degrees delivered its letter, a spokesman said the regulator was monitoring the situation), but Spark has already outlined a likely defence.
Spokeswoman Ellie Cross would not comment on financial terms of the wholesale deal, but she said the likes of Vodafone, Vocus and Orcon had been offered a commission for the very pass they sold to their customers for a one-off event like the Rugby World Cup.
And in terms of the regular $20-a-month Spark Sport service, she said, "Broadband/mobile retailers will have broad discretion as to how they offer Spark Sport monthly subscriptions to their customers - including the ability to bundle Spark Sport with their own products and services."
