Court Says Play Ball

Michael Hedges July 22, 2013 - Follow on Twitter

That big live events are fought over by many drives more than one business model. Often they compete, in that free market way. All is fair, indeed, balancing competition, rights and the money. Not everybody wins but everyone watches.

In a decision adding as many questions as answers the European Court of Justice (ECJ) ruled that EU Member States can prevent pay-TV operators from buying exclusive rights to certain big sports events. The ECJ affirmed the EU General Court’s decision in 2011, which was appealed by football rights tendering associations FIFA and UEFA. Upheld is the right of Member States, in this case Belgium and the UK, to restrict “events of national importance” to free-to-air television.

Lawyers for FIFA did their best to question the General Court’s review of what does and does not constitute sporting events in the national interest, whether or not FIFA’s World Cup is a single event, several or something in between. Also argued was FIFA’s position that banning the sale of broadcast rights to pay-TV operators would cause them disproportionate harm. The ECJ budged hardly at all in its decision (July 18), which was telegraphed last December in a statement by ECJ Advocate General Niilo Jaaskinen.

FIFA expressed “disappointment,” in a statement on its website fifa.com (July 18). “The concept of enforcing free-to-air coverage of all 64 matches at the FIFA World Cup distorts the media market, negatively impacting FIFA’s ability to reach football fans with new services. This can particularly affect younger fans who consume media in a variety of ways beyond traditional TV.”

The “concept” of preserving events of national importance for free-to-air TV has been part of EU rules for nearly 25 years and constantly escalating sports rights fees fueled by broadcast – and other – competitors looking to cash-in with exclusive rights has only hardened the European Commission’s position. Pay-TV operators, including a few telecoms, have bid premiums for sports rights, even creating new digital sports channels, and pleasing many customers and, of course, sellers of sports rights. Were it not for that legacy clause in the EC’s Audiovisual Media Services (AVMS) Directive establishing the right of Member States to list big events of “distinct cultural importance for the population…in particular as a catalyst of cultural identity” free-to-air TV broadcasters, public broadcasters in particular, would have limited access.

Establishing “events of national importance” is a process, which the ECJ decision reiterated. A junior bureaucrat in the Culture Ministry doesn’t simply jot down their ten favorite sports events and email them to the EC. Hearings are held, typically, with relevant stakeholders, all very transparent, with a burden to show both relevance and proportionality. Several Members States have their list; several have not.

The EC then reviews the submission and, once satisfied, makes it official. But the Court stressed limits to the EC’s role. “It is for the Member States alone to determine the events which are of major importance and that the Commission’s role in that respect is limited to determining whether the Member States have complied with European Union law in exercising their discretion.”

The ECJ decision may inflict pain on sports right holders and, arguably, pay TV operators. And it’s clear that EU media policy abides no conflict between culture and the free market. Yet to be determined is the strength of case law for intellectual property rights in the national interest.

See also in ftm Knowledge

Media Laws-Digital Dividend

Lawmakers and lawyers are challlenged by the new digital reality. We've seen new rules proposed, enacted, dismissed and changed as quickly as technology takes a new turn. The ftm Knowledge file looks at the grand plans and their consequences. 76 pages PDF (April 2013)

Order here

The Games People Watch

Media and sports are a powerful combination. Together they capture huge audiences and considerable money. This ftm Knowledge file looks at the competition from football rights battles and cycling coverage with new media to the Olympic Games. 82 pages PDF (October 2012)

Order here