Sports Law Insights: Sports Broadcasting
Sports broadcasting rights have progressively gained importance in the last few decades. Sporting bodies have adopted business models based on the exploitation of these assets and in doing so some leagues have become very important players in the market for entertainment. When sports bodies such as the English Premier League or UEFA decide to collectively sell their broadcasting rights, they restrict competition within the market.
This type of conduct prevents single clubs from exploiting the rights individually, and imposes on the broadcaster an obligation to bargain with entities provided with a monopoly power. This restriction is prohibited by competition law, at both national and European level. These restrictions are usually balanced with positive effects, such as the reduction of transaction costs between participants or the strengthening of the brand of a League and a better enforcement of trademark rights. Furthermore, the sharing of the revenue may enhance the competitive balance of a league, which ultimately would lead to a more profitable product when placed on the market.
The European Commission has recognized the legitimacy of a cartelization of the market for broadcasting rights of the Champions League. However, depending on the characteristics of the market, the authorities have set some conditions, such as the subdivision of rights into different packages, the prohibition of a single buyer to acquire all the rights and the limitation of the duration of the exclusivity to a maximum of three years.
More recently, the decision of the Court of Justice of the European Union in the Karen Murphy case affirmed that a system of rights licensed under a territorial exclusivity, which prohibits the import, sale or use of foreign decoder cards to access the Premier League’s matches infringes the freedom to provide services. Thus it can be justified only if proportionate and necessary to the purpose of achieving goals of public interest.
Directive 89/552/CEE, also known as “Television Without Frontiers” establishes that every EU citizen has a right to see freely an event considered to be of major importance for society within the respective Member State. Member States are thus empowered to establish a list of “protected” events that must be made available on free-to-air TV. However, as this provision limits the ability of pay TV broadcasters to purchase and exploit rights, FIFA and UEFA have challenged the selection made by U.K. and Belgium. The European Court of Justice established that Member States are free to determine which events need protection in light of their importance for their own society.