On the Ball: Premier League broadcasting rights threatened by today's Advocate General's opinion
This morning, Advocate General (AG) Kokott’s Opinion was published in relation to the long running pub broadcasting cases. The AG sided with publican Karen Murphy and decoder supplier QC Leisure. This case is of major significance because:
- It may change how rights - and not only football rights - are sold to broadcasters throughout Europe - it may remove the ability for rights owners to segment national markets
- It may change how consumers buy television content - it may be far easier for consumers to subscribe to foreign broadcasters by using decoder cards and other equipment that is available in other member states
Mrs Murphy and QC Leisure argue that the way in which the Premier League enters into its contracts with various broadcasters throughout the EU, among other things, infringes EU principles of free movement of goods and services and EU competition law. They argue that the Premier League’s contractual provisions restrict the ability of Premier League rights holding broadcasters to screen live pictures outside their own designated territory. They also contend that this restricts the capacity of Mrs Murphy or QC Leisure to either view, or purchase decoders to view, live Premier League matches from any source other than the exclusive national Premier League rights holding broadcaster (i.e. Sky and ESPN can only broadcast their exclusive pictures in their allotted UK territory). Such restrictions, they say, are incompatible with EU principles of free movement and EU competition law.
The FA Premier League, in response, relies on a range of provisions in EU copyright and broadcasting law as well as ECJ precedent going back to the 1970s which supports, or appears to support, the notion of exclusive licensing in the context of broadcasting rights.
The AG does not mince her words. She describes such territorial restrictions as a "serious impairment on the freedom to provide services" and brands the territorial exclusivity granted by the Premier League to Sky as "tantamount to profiting from the elimination of the internal market." Moreover, she is unable to see any countervailing justification for such restrictions. Economic considerations are brushed aside with the statement that “there is no specific right to charge different prices for a work in each Member State. Rather it forms part of the logic of the internal market that price differences should be offset by trade”. Similarly, protection of the intellectual property rights in live football transmissions is given short shrift: “a partitioning of the internal market for the reception of satellite broadcasts is not necessary in order to protect the specific subject-matter of the rights to live football broadcasts”.
The AG does, however, recognise the right of broadcast rights holders to apply different charging models and licensing terms as between domestic users and pubs provided that this does not involve territorial restrictions.
The AG’s Opinion is of course not binding. The ECJ may still take a different approach in its judgment which is expected later this year. Whilst Advocate General Opinions are followed more often than not, it is not unusual for the Court to take a different view especially in controversial cases. However, if the Court follows the AG’s Opinion, its ruling will strike at the very heart of the Premier League's lucrative European broadcasting rights deals. Exclusivity has been the cornerstone of the Premier League's highly successful broadcasting revenue strategy. Should the Opinion be upheld by the Court, the implications for rights holders and consumers could be groundbreaking.
Should the ECJ side with the AG, the Premier League will need a fundamental rethink of how it sells its lucrative rights. This is because it could no longer guarantee total exclusivity on a national territorial basis for broadcasters. This may lead to, for example, the Premier League marketing its rights on a pan-European wide basis. Similarly, if the ECJ confirms the AG's Opinion, consumers will be able to lawfully purchase the cheapest European channel broadcasting Premier League matches without the threat of prosecution. This then would allow for price competition for broadcasters and consumers alike on a European-wide basis.
An ECJ ruling along the lines of the AG’s Opinion would reverberate beyond football and indeed beyond sport into the licensing of broadcast content generally. Any rights holder that sells its broadcasting rights on an exclusive territorial basis would need to carefully review the way its rights are sold in the EU. Everyone is now awaiting the ECJ judgment which could still be several months away.
It must not be forgotten though that the ECJ may yet rule in favour of the Premier League and uphold its territorial exclusivity.
Mrs Murphy and QC Leisure are one nil up but it's only half time!