Published on February 8th, 2011 | by Dean Carr
Pub landlady’s EU case paves way for Premier League rights revolution
Venues showing live Premier League matches from foreign broadcasters are not breaking EU law, court advised.
The European Union’s highest court was today advised to rule that EU law does not prohibit pubs showing live Premier League matches from foreign broadcasters, potentially sparking a revolution in the way media sports rights are sold across the continent.
Juliane Kokott, one of the eight advocate generals of the European court of justice, gave her view on a landmark case brought by Karen Murphy, landlady of the Red, White and Blue pub in Portsmouth. Murphy uses a Greek decoder card to show live Premier League matches at much cheaper rates than BSkyB charges commercial premises in the UK.
The FA Premier League, which sells TV rights exclusively to broadcasters across Europe on a territory-by-territory basis, is attempting to clamp down on British pubs buying in live coverage from foreign broadcasters.
Kokott today opened the door for the potential dismantling of this country-specific sports rights regime, saying that in her opinion the “exclusivity of the rights in question have the effect of partitioning the internal market into quite separate national markets, something which constitutes a serious impairment of freedom to provide services”.
While Kokott’s opinion is not binding, the ECJ tends to follow the advice of advocate generals in the majority of cases. The Luxembourg-based court is expected to deliver its verdict on the Murphy case later this year.
Manchester United fans watch football in a pub. Photograph: Gary Calton
Kokott said that the “economic exploitation of the [TV] rights is not is not undermined by the use of
foreign decoder cards as the corresponding charges have been paid for those cards”.
“Whilst those charges are not as high as the charges imposed in the UK there is … no specific right tocharge different prices for a work in each member state,” she added.
Kokott said that the idea of selling on a territorial exclusivity basis was “tantamount to profiting from the elimination of the internal market”.
She dismissed the copyright argument put forward by the Premier League that it held exclusive rights to matches broadcast to the public. “There are no comprehensive rights which protect the communication of a broadcast to the public where no entrance fee is charged,” she said.
The Premier League said that it believes Kokott’s opinion would “damage the interests of broadcasters and viewers of Premier League football across the EU”.
A spokesman added that the advocate general’s view did not appear to be compatible with the “existing body of EU case law”.
“The opinion expressed by Advocate gGeneral Kokott may reflect a particular policy view in relation to the provision of audio-visual services throughout the EU,” he said.
“However if her opinion were to be reflected in the ECJ’s judgment it would prevent rights holders across Europe from marketing their rights in a way which meets demand from broadcasters whose clear preference is to acquire, and pay for, exclusive rights within their own territory only and to use those rights to create services which satisfy the cultural preferences of their viewers within that territory.”
The Premier League said that if the European Commission “wants to create a pan-European licensing model for sports, film and music then it must go through the proper consultative and legislative processes to change the law rather than attempting to force through legislative changes via the courts”.
“The ECJ is there to enforce the law, not change it,” the spokesman said.
The Premier League will make more than £1.6bn in the UK alone from its current three-year deal
with BSkyB and has a separate deal in this country for live match coverage with ESPN.
The Premier League is believed to have made well in excess of £1bn in TV deals outside the UK for rights covering 2010 to 2013, almost double the £625m made under the previous deal period, with the popularity of the top English division booming in territories including the Middle East, North Africa, Hong Kong and Singapore.
No figures are given for Europe, however it is understood that France, Scandinavia and Germany are the most lucrative markets for Premier League rights.
Investment bank Jefferies said that the Premier League may have to look to offer a sweetener, such as the international broadcasting rights, for a nominal amount to BSkyB to keep the value of the deal up.
Jefferies claims BSkyB makes about £200m a year in revenue from selling subscriptions to pubs and other commercial premises in the UK.
However, Jefferies only sees about £60m to £70m “at risk” if landlords were eventually able to buy cheaper Premier League coverage from overseas.
“Not all subscriptions are primarily driven by English Premier League [matches], but it remains a significant attraction for some of Sky’s 44,000 pubs, clubs and office subscribers,” the investment bank said.
Becket McGrath, a partner in EU and competition at law firm Edwards Angell Palmer & Dodge, said: “If followed by the full court, this opinion has serious implications for the Premier League and Sky.
“In the short term, Sky will face more defections from subscribers to foreign sources of Premier League football. In the longer term, the Premier League is likely to receive less money when it next auctions off its TV rights, as no bid
der will be prepared to offer as much for UK rights. It may ultimately be forced to abandon territorial licensing all together.”
One observer pointed out that while the specifics of the case deal with sports rights, the outcome of the
ECJ judgement has ramifications for any audiovisual industry that sells packaged rights in Europe including the film, TV and music sectors.
BSkyB declined to comment.
Source : The Guardian