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Sports Media – Understanding the value of Reserved Rights

28/11/2017

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United Kingdom

In an era where sport is being consumed on an ever expanding number of media, the particular rights licensed by rights holders to their licensee in media outlets are becoming more heavily negotiated.

In an era where sport is being consumed on an ever expanding number of media, the particular rights licensed by rights holders to their licensee in media outlets are becoming more heavily negotiated.

Prior to 2017, sports media rights tended to be sold on a platform neutral all-rights basis in a specified number of territories throughout the world. Given the number of outlets that reach a substantial number of viewers, parties can now effectively negotiate what type of transmissions the rights extend to (i.e. pay or free to air transmission). For many rights holders, selling the terrestrial rights in their content and retaining pay TV rights may be beneficial to enable those rights to be exploited by another third party, but does not necessarily address the question of extending reach and driving engagement in the sport in question that teams and sponsors want.

Therefore the rights that are most valuable, and that rights holders seek most commonly to retain are the live broadcast of an event, competition or match on the rights holder's social media pages (including YouTube), as well as requiring the reversion of the rights back to the rights holder if the licensee fails to exploit the rights in a particular "dark" country within the overall territory it has purchased.

Addressing each of these reserved rights in turn – the importance of live rights in sport in the millennial age is unquestionable and it is essential that rights holders ensure that live coverage of the event in question occurs. With the prevalence of social media platforms available to a rights holder to broadcast an event, the rights holder should negotiate the right to stream the event on said social media platforms in territories where the event would otherwise not be shown live by the licensee or its sub-licensees. If the licensee agrees to this reserved right, the rights holder would clearly have to ensure that the coverage was geoblocked to the territory in question.

In addition to the above, a rights holder could insert a further reserved right such that if before an event, the licensee cannot agree a deal with a broadcaster for exploitation of the rights in a particular territory (or will not broadcast the event in a direct to consumer capacity themselves), those rights will then be clawed back by the rights holder either to exploit themselves or to agree a deal with another third party licensee. This is key for the rights holder to ensure maximum reach and engagement opportunity for the sport throughout the world.  An obvious negotiating point here will be at what stage prior to the event the licensee has to inform the rights holder that such territory will be considered a "dark" territory in order for this mechanism to kick in.

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