Docstoc

Broadcasting Rights

Document Sample
Broadcasting Rights Powered By Docstoc
					Broadcasting Rights
Daniel Geey
Solicitor
Daniel.Geey@ffw.com




13 March 2009
Value of Recent Football Deals
Competition           Period        Value (£millions)   Details

Champions League      2009 – 2012   405                 Sky: £240m
                                                        ITV: £165m
FA Premier League     2007 – 2010   1,706               Sky: £1,314m; Setanta: £392m
FA Premier League     2010 – 2013   1,782               Sky: £1,623m; Setanta: £159m

FA Cup                2008 – 2012   425                 ITV: England home internationals,
(+ England matches)                                     England away friendlies, FA Women‟s
                                                        Cup Final;
                                                        Setanta: England home friendlies and
                                                        away internationals, England women‟s
                                                        internationals, England U21 matches,
                                                        Community Shield, Youth Cup, FA
                                                        Trophy, FA
                                                        Vase
                                                        N.B. Breakdown of price paid not known
Carling Cup           2009 – 2012   264                 BBC: 10 Championship matches, Carling
(+ Coca-Cola                                            Cup both legs of both semi-finals and
Championship)                                           final;
                                                        Sky: 65 Championship matches and all
                                                        play-offs,
                                                        Carling Cup – 2 matches from each
                                                        round, both legs of both semi-finals and
                                                        final.
Broadcasting Assessment Market Definitions

•   RPC

    “..we think that it is putting it too high to say that there is no substitute for Premier League football so far as
    Pay-TV is concerned, for this underrates such football competitions as the FA Cup and the UEFA Champions
    League.”

•   MMC Report

    “…we do not see grounds for a wider definition involving the whole of football, as it does not seem credible
    to us that matches involving clubs drawn exclusively from divisions other than the Premier League would be
    acceptable substitutes...”

•   OFT
    ‘the Director finds that … the relevant markets are no wider than the wholesale and retail supply of channels
    containing sports content that is unique to pay TV. The content that he has identified as falling within this
    category during this investigation is live FAPL football’

•   Ofcom Consultation (most recent) concurred with the MMC’s and OFT’s narrow market conclusions

    Ofcom found that there were only 48 matches featuring a PL team on FTA TV, compared with 174 on premium
    sports channels. As such, they felt that this was one of the reasons why matches on FTA TV were not
    sufficiently substitutable and were likely to lie outside its relevant market definition. Ofcom did, nonetheless,
    believe that the Champions League in particular, could fall within its market definition.
Collectivity, Exclusivity and the RPC case

• Collectivity is where a group of clubs act together to form a league,
  play in competitions and negotiate commercial deals as one entity.
• PL acting as a cartel/monopoly. Italy returning to collective selling?
• Exclusivity is the means by which a broadcaster can effectively
  guarantee large audiences for a popular product. By paying an
  exclusivity premium to the FAPL, broadcasters can ensure that
  consumers can only view the event through one medium.
• Length of exclusivity- must no be too long otherwise market
  foreclosure unless new entrant E.g. Sky in 1992
RPC Case

•   OFT brought an action against the PL whom it considered acted as a cartel in
    collectively selling a small number of broadcasting matches whilst limiting supply for
    televised matches by exclusively selling broadcasting rights to one broadcaster.

•   Had the OFT been successful it would have
     • signalled the end of collective selling and possibly the redistribution of income in the
        Football League.
     • end of exclusive selling in the Premier League leading to individual clubs brokering
        deals with broadcasters (like in Spain)

•   Court was worried about the doomsday scenario, as it only had powers to rule the
    restrictions illegal or justify them. Strangely justified competition at 3-4 yearly intervals
    for one package costing £100m's as effective competition.

•   This meant very high barriers to entry for new entrants which the European Commission
    were concerned about.
Commission 2001-05 Negotiations and Intervention

• Commission still concerned with exclusivity.
• 2004 broadcasting deal unbundled with 4 rights packages
  but Sky won them all. Commission unhappy.
• Stipulation in the 2007 PL tender document that of the 6
  packaged rights no broadcaster could win all six. 2007-10
  Setanta got two. 2010-13 Setanta retained one.
• Effects of packaging the rights- positive or negative- new
  entrant (now on brink of financial trouble) yet consumers
  paying for two subscriptions.
• 2003-6 Champions League product packaged into smaller
  exclusive rights bundles with ITV and Sky have
Article 81of the EC Treaty


• „all agreements between undertakings…which may affect
  trade between member states and which have as their
  object or effect the prevention, restriction or distortion of
  competition within the common market.‟
Premier League Broadcasting Cases

•   There are currently two cases in which the PL is involved; they relate to Karen
    Murphy and QC Leisure. Mrs Murphy is a pub owner and QC Leisure is a
    stockist and supplier of foreign decoders to pubs and the general public in the
    UK. References have been made to the European Courts of Justice (ECJ)
•   They argue that the PL‟s contractual provisions restrict
     •   the ability of PL rights holding broadcasters to screen live pictures outside their own designated
         territory.
     •   the capacity of Mrs Murphy or QC Leisure to either view, or purchase decoders to view, live PL
         matches from any source other than the exclusive national PL rights holding broadcaster (i.e.
         Sky and Setanta can only broadcast their exclusive pictures in their allotted UK territory).
•   The PL argues that the system of national Member State restrictions is needed
    to protect the value that is attached to their product and that the products‟ live
    and exclusive characteristics create the value which has made the PL such a
    success story.
•   Rights holders wishing to guard their valuable licensing and intellectual
    property rights versus European free movement legislation which in this
    instance safeguards European consumers‟ right to purchase live PL matches
    from the cheapest provider in the EC.
Current Climate

• ITV and Setanta looking to renegotiate payment plans for
  FA Cup


• Huge deal for the Premier League


• Consumers happy to continue to pay for premium content?
Listed Events

Group A (Full Live Coverage Protected)          Group B (Secondary Coverage
                                                   Protected)
•   The Olympic Games
•   The FIFA World Cup Finals Tournament        •   Cricket Test Matches played in England
•   The European Football Championship Finals   •   Non-Finals play in the Wimbledon
    Tournament
                                                    Tournament
•   The FA Cup Final
•   The Scottish FA Cup Final (in Scotland)     •   All Other Matches in the Rugby World
                                                    Cup Finals Tournament
•   The Grand National
•   The Derby                                   •   Six Nations Rugby Tournament Matches
                                                    Involving Home Countries
•   The Wimbledon Tennis Finals
•   The Rugby League Challenge Cup Final        •   The Commonwealth Games
•   The Rugby World Cup Final                   •   The World Athletics Championship
                                                •   The Cricket World Cup - the Final,
                                                    Semi-finals and Matches Involving
                                                    Home Nations' Teams
                                                •   The Ryder Cup
                                                •   The Open Golf Championship
Listed Events II

•   Jeremy Darroch, chief executive of UK pay-operator BSkyB, said that he will
    lobby for the abolition of listed-events legislation.
•   He said that “It‟s not for me to dictate to a rights holder how they should sell
    their rights. What we want is the chance to pitch and show what we can do to
    showcase their sport. There is no such thing as free sports coverage. We all
    pay our licence fee.”

•   Roger Mosey, head of sport at public-service broadcaster the BBC, defended
    the present free-to-air “crown jewels” list, which includes the Olympics, World
    Cups and European Championships. He said that “Pay-TV can hardly claim it's
    starved of good content by the current framework” and that if the list was
    reduced the UK would “lose an important part of our national life”.

•   A review of listed-events legislation is now being conducted by former English
    FA executive director David Davies. The process will include consultation with
    broadcasters, rights holders and the public, and is expected to report to the
    government by the second half of the year.
UEFA and FIFA Challenges to the List

• government's duty to safeguard certain sporting and
  cultural events (an artificial barrier to entry)
                             v
• having concern for business enterprise and the need for a
  competitive market in the sale of sports rights.
• UEFA has challenged the European Commission‟s
  decision to approve the listing of the entire UEFA
  European Championship Finals Tournament by the UK,
  whilst FIFA have challenged the listing of the entire 64
  matches of the FIFA World Cup by both Belgium and the
  UK.
Discussion Question

• "Are rights holders wishes (such as the Premier League or
  UEFA) being listened too enough when regulating the
  European broadcasting market or conversely are
  consumers losing out in having to pay for more
  subscription based products that were once free to view?"

				
DOCUMENT INFO
Shared By:
Categories:
Stats:
views:30
posted:2/13/2011
language:English
pages:13