The findings could affect Sky’s exclusivity deals with the US studios as well as the wholesale price it charges rivals, such as Virgin Media, to carry the service.

The UK’s Competition Commission has found that Sky is making “excess profits” from its movies service in an initial working paper.

The findings could affect Sky’s exclusivity deals with the US studios as well as the wholesale price it charges rivals, such as Virgin Media, to carry the service.

The paper acknowledged that Sky had taken significant risks in the past by signing the movie deals but also concluded these had taken place many years ago.

Sky rejected the findings of the working paper, which was worked on with consultancy Oxera, and said they demonstrated ‘a weak understanding’ of Sky’s business.

Last year Sky was forced by Ofcom to cut the wholesale prices it charged rival TV operators to offer its sports package. It continues to appeal the decision.

A Sky spokesperson said: “We stand by our record in bringing choice and innovation to UK consumers. We believe that Sky’s profitability today reflects its past investments and its success in delivering highly valued products to customers.

The CC’s movies investigation is at a preliminary stage and we will respond to its working papers as the process continues.”

(This story was originally published on Broadcastnow.co.uk)