The Premier League fear Ofcom's controversial Sky ruling will lead to the world's top players turning their back on England's top flight.

Sky will have to sell on Sky Sports 1 and 2 to rival broadcasters for up to 23% less than the current wholesale price, according to the ruling by the regulator.

The Premier League, who have just signed a three-year £1.782billion broadcast deal with Sky paying £1.62billion of that, are considering a legal challenge believing that the ruling will drive down the value of sport's broadcast rights.

Their biggest fear is that a drop in the money available to the clubs will stop the best players being attracted to the most successful league in the world - and have an impact on the cash it passes on to the rest of football.

A Premier League statement read: "Reduced income from rights sales will be rapidly reflected at every level of sport. It will be harder to recruit and retain top talent, youth development will come under pressure, investment in grounds and facilities will be deferred and, in the case of football, the ability to contribute to the rest of the game from the Championship to local parks will be severely diminished."

Premier League chief executive Richard Scudamore called the ruling an "ill-judged and disproportionate intervention in the broadcast market" and said it rewarded broadcasters who had shown little interest in bidding for sports rights but still wanted to show it on their platforms. He added: "We do not rule out a challenge to protect the interests of fans, clubs and the wider game."

The England and Wales Cricket Board, the Rugby Football Union and the Rugby Football League have also strongly criticised the ruling. Yet Sky's rivals such as Virgin Media say the ruling does not go far enough.

Ofcom began investigating the pay TV market in March 2007 after concerns were raised by BT, Virgin Media, TopUp TV and Setanta, which has since gone bust. Ofcom said the decision, after a three-year investigation into the industry, would ensure "fair and effective competition".

The regulator said today: "Ofcom has concluded that Sky has market power in the wholesale provision of premium channels. Ofcom has also concluded that Sky exploits this market power by restricting the distribution of its premium channels to rival pay TV providers.

"This prevents fair and effective competition, reduces consumer choice and holds back innovation and investment by Sky's rivals. The decisions are therefore designed to ensure fair and effective competition which should lead to greater investment, innovation and choice for consumers."

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