
BROADCASTING OF SPORTS EVENTS AND COMPETITION LAW
A.-M. Wachtmeister, chef d'Unité IV/C2
Competition Policy Newsletter 1998 - number 2 - June
INTRODUCTION
1. The purpose of this document is to develop an updated
approach to the application of competition law to issues arising in the
broadcasting of sports events in response to the rapid changes that are
taking place. Over the last few years sports broadcasting has become a
very important area economically. Sports programmes, and certain sports in
particular, are a key ingredient for broadcasters and have driven the
development of pay-TV. With increased deregulation and the introduction of
new broadcasting technology, broadcasting services are going through
continuous and rapid development with major consequences such as an
increase in channels and capacity. Digital technology, pay-TV and
pay-per-view services, providing additional broadcasting time and
capacity, offer to viewers who are prepared to pay for the services,
increasing opportunities to view a growing number of sports, either on
theme channels or on an event-by-event basis. The new services potentially
offer improved picture quality, a choice of perspective of the event and
the opportunity to watch the programmes when the viewer wishes to. The
importance of sports programming to broadcasters is demonstrated in the
corresponding growth of competition (and price) for the acquisition of
sports broadcasting rights. In the context of the new services,
broadcasting of sports events can no longer be viewed in terms of a mix of
programmes.
2. While these developments may indicate a potentially
highly competitive market, concerns have been expressed about the
consequences on the television landscape of the EU of current practices in
the buying, selling and exploitation of broadcasting rights to sports
rights. There is now a need for the Commission to examine these practices,
many of which have not been considered contentious in the past, and to
draw up a general competition policy approach to their assessment. Some
Member States have already initiated actions under their domestic
competition rules.
3. Broadcasting of sports events is becoming more and
more cross-border or international. Television viewers in one Member State
are increasingly able to see not only the most important international
championships but national championships from other countries.
International player and management mobility has generated more interest
in sports events taking place in other Member States. The Commission will
have to apply the competition rules more and more to horizontal and
vertical arrangements relating to the broadcasting rights to sports
events.
4. It may be helpful, when considering whether an
agreement affects trade between Member States, to consider the following
:-
television programmes are received and seen in a second
Member State - this is not in itself sufficient to make community law
applicable;
if clubs or teams in one Member State make an agreement
amongst themselves to fix prices for broadcasts of their sporting events,
such an agreement would probably not be sufficient to make Article 85 of
the EC Treaty applicable. It would be applicable if the teams involved
came from more than one country, for example, for the World Cup;
there will probably be an effect on trade between Member
States if a vendor of rights has sold or is likely to sell to a buyer in
another Member State;
if the buyer of the rights is likely to sublicense in
other Member States, there will usually be an effect on trade between
Member States
5. Similar issues arise under Community competition law
and national competition law when assessing agreements and complaints. A
common approach to analysing the competition problems would offer a degree
of certainty to those concluding broadcasting contracts. It is however not
possible to provide an answer to each problem, which could then be applied
in each Member State or by the Commission to cross-border cases. The
facts, and viewers preferences for sports, will be different in each
Member State. The solution in one Member State may be different to the
solution in another Member State. The effect on trade between Member
States of national arrangements will also differ.
6. Many of the issues identified in the following
chapters are often inter-related and so cannot be considered in isolation.
This analysis is by no means exhaustive and other issues may arise in
different circumstances in the future.
7. Exclusivity is an accepted commercial practice in the
broadcasting sector. It guarantees the value of a programme, and is
particularly important in the case of sports, as a broadcast of a sports
event is valuable for only a very short time. Exclusivity for limited
periods should not in itself raise competition concerns. However,
competition problems may arise. Duration, quantity and upstream and
downstream market power need to be examined in order to assess whether the
exclusivity seriously restricts competition. A longer period of
exclusivity may be appropriate in certain circumstances, for example, for
the broadcasting of the Olympic Games, which occur every four years.
8. Exclusivity has also been questioned on grounds not
related to competition law, in particular, where it is exercised by pay-TV
operators. Article 3A of the new "television without frontiers"
Directive, is an important measure addressing exclusive broadcasting
rights to sports events which was introduced to ensure that Member States
are able, at the national level, to protect the right to information and
to provide for wide access by the public to television coverage of events
of major importance for society. Such a measure is not aimed at addressing
competition problems.. Article 3A may affect the conditions of competition
between free-access television and scrambled services.
9. Competition rules are neutral with respect to
different types of broadcasters and do not provide a legal basis for
favouring one category over another. The Court of First Instance (in the
EBU Eurovision judgement) has stated that, unless Article 90(2)applies,
the Commission would not be justified in giving a preference to television
stations merely because they have a public service role, or to publicly
owned stations, or to those financed from officially-collected licence
fees.
10. Fundamental to consideration of any competition
policy implications is the issue of who owns the broadcasting rights to
sports events, as witnessed by recent court cases in the Netherlands and
Germany concerning rights to national football games.
11. Many sports have now entered the realms of the
market economy. Their commercial activities are operated as businesses.
The income received from the sale of broadcasting rights is transforming
the sports world and widening the gulf between amateurs and professionals.
As with any market, commercial practices fall under the scrutiny of the
competition rules. Not only competition among participants in a particular
sport may be affected by commercial practices but competition among
broadcasters may also be affected.
12. Apart from commercial considerations affecting
competition, regard may also be had for genuine objectives based on other
considerations applicable to sport because of its intrinsic
characteristics and importance to society : "Maintaining a balance
between clubs by preserving a certain degree of equality and uncertainty
as to results" and "encouraging the training of young players"
- were two legitimate objectives recognised in the Judgement of the Court
in the Bosman case.
13. In the light of these general considerations, this
paper now turns to the main legal issues which arise, or may arise, under
Community competition law, firstly concerning the provisions for the
broadcasting rights to major sports events under Article 3A of the new "television
without frontiers" Directive, then with respect to Community
competition law..
I. Priority for free-access television for the coverage
of major sports events
1. There are advantages for viewers if important sports
rights are broadcast by free-access television, so that consumers are not
obliged to make additional payments for decoders, receiving equipment or
cable subscription to view such events, in particular, those in which
their compatriot sports men and women take part in international events.
2. More generally, concern has arisen, with the growth
and development of pay-TV, that viewers are being denied free-access to
important national events because large subscription broadcasters have
been buying up those rights to develop their own services. It is said that
some sporting events are of such national or heritage importance, that
they reflect common identity and value, so that broad free access should
be given to them. The complaints are from "public interest" or "national
heritage" concern, rather than on competition grounds, and a
regulatory approach would be necessary to achieve the desired result.
3. Competition law is not the right instrument for
achieving cultural or regulatory aims. As confirmed by the Eurovision
judgement, competition rules are neutral with respect to different types
of broadcasting and in principle, do not provide a legal base for
favouring one category of broadcaster over others.
4. Further to an amendment by the European Parliament,
the directive modifying directive 89/552/EEC ("television without
frontiers") includes a new Article 3A. The purpose of this Article is
explained in recital 18 which reads as follows :
"Whereas it is essential that Member States should
be able to take measures to protect the right to information and to ensure
wide access by the public to television coverage of national or
non-national events of major importance for society, such as the Olympic
Games, the football World Cup and the European football Championship;
whereas to this end Member States retain the right to take measures
compatible with Community law aimed at regulating the exercise by
broadcasters under their jurisdiction of exclusive broadcasting rights to
such events".
5. Article 3A paragraph 3 stipulates, moreover, that
Member States shall ensure that broadcasters under their jurisdiction do
not exercise the exclusive rights purchased by those broadcasters in such
a way that a substantial proportion of the public in another Member State
is deprived of the possibility of following events, which are designated
by that other Member State, on free television. According to information
supplied to the Commission by national delegations to the Contact
Committee set up by the Directive, a large majority of Member States
intend to notify their measures taken under Article 3A paragraph 1 in the
course of 1998. All Member States have indicated timetables for
transposition of Article 3A paragraph 3 by the deadline required by the
Directive, i.e. 30 December 1998.
6. The procedure laid down in Article 3A paragraph 2
requires the Member States to notify their measures and the Commission to
verify their compatibility with Community law within a period of three
months. The Commission must seek the opinion of the Committee established
by the Directive. Measures taken by Member States in order to guarantee
the availability of coverage of certain events must be in accordance inter
alia with Article 90 of the Treaty.
II. The relevant market in sports broadcasting cases
1. The correct definition of the relevant market will be
crucial to the assessment of cases concerning the issues referred to
below. In the current climate of quickly evolving broadcasting technology
and means of distribution, in particular, the development of pay-TV and
pay-per-view, the nature and scope of the markets which are relevant are
changing. The geographic market also is becoming more and more
international as more cross-border broadcasts of sports are offered.
2. With the emergence and growing importance of
dedicated subscription television sports channels over the last five
years, the market is probably no longer only for sport programmes in
general, but for some specific sports, for example, for football or for
Formula 1 motor racing. Standard market definitions may not apply in all
Member States. The markets are not necessarily the same in all Member
States, as national preferences differ from State to State.
3. When defining the relevant market, demand
substitution is not to be viewed exclusively from the view point of the
final consumer, since some of the available services are not offered to
the final consumer. In connection with rights to televise sports events, a
variety of services can be provided :
owners of broadcasting rights to sports events sell the
rights to broadcasters or to sports rights agencies;
the rights can be exclusive or non-exclusive, for live
or deferred transmission, or for highlights;
a rights owner or broadcaster may subcontract the
production of the signal;
sports rights agencies sell rights to broadcasters;
companies wishing to associate their brand with a
particular sport, particularly if it receives television exposure, sponsor
competitions, organisers of sports events, clubs, teams or individuals;
broadcasters and/or advertising brokers sell advertising
time or sponsorship to companies who want exposure on television during
sports programmes;
broadcasters owning sports programmes, or owners of the
rights or their agents, license other broadcasters to broadcast the
programmes;
broadcasters can contract with cable companies or
operators of other means of transmissions to broadcast their channels and
sports programmes;
cable companies provide television to householders;
broadcasters transmit sports programmes to viewers;
viewers may exercise a choice by subscribing to a
dedicated sports broadcasting service (rather than choosing from a variety
of entertainment programmes on traditional advertising or licence fee
funded television).
4. Some sports events are more important, and attract
the attention of more viewers, than others. A survey in the UK for the BBC
on sport on television indicated that 92% of viewers were interested in
watching one or more of the major sports events on television. For really
important events, there is no satisfactory substitute for live coverage
(viewers' interest in most events is short-lived). There is little
substitutability between sports for fans. For football supporters,
television coverage of athletics or golf is not a satisfactory substitute.
There may be little substitutability between different sports for
sponsors, whose investment can be vital for the viability of a sport. For
broadcasters some sports generate more income from advertising revenue or
subscription than others. There may be an element of prestige in
broadcasting certain major sports. For them, the importance and interest
of a sports event to a large number of viewers determines whether other
sports programmes are a satisfactory substitute. Football, the Olympic
Games and Formula One racing are the most popular televised sports events
world-wide.
5. There is a market for sports rights, whether sold or
licensed, and this market may be further sub-divided into the market for
rights to specific sports. Broadcasting rights may be for live or deferred
full coverage of an entire event, for extracts and for highlights. The
value and use of each type of right differs for broadcasters. The
conditions of competition for the various types of broadcaster need to be
taken into consideration. Conditions for traditional incumbents -
terrestrial and/or free-access broadcasters, offering a general programme
mix, who are dependent on licence fee or advertising revenue for their
funding, are likely to be different from those for the emerging new
broadcasting services, pay-TV and pay-per-view, which include dedicated
sports channels and which are dependent upon viewers subscription
fees. A larger proportion of the programming of the new services consists
of sports. In the context of sponsors, television advertisers or pay-TV,
these factors suggest that it is necessary to define the markets more
narrowly, as those for coverage of important events in a particular sport.
6. In the Netherlands, the Decision of the Ministry for
Economic Affairs in the KNVB/collective selling of highlights to football
games case, the decision defines a separate market for football
broadcasting rights.
7. In any event, the guidelines set out in the
Commission Notice on Market Definition should be referred to when
considering definition of the relevant market.
III. Exclusivity
1. The sale of exclusive rights to broadcast sports
events is an accepted commercial practice. For sports organisers, the sale
of exclusive rights is a way of ensuring the maximum short-term
profitability of the event organised, the price paid for the exclusivity
by one broadcaster probably being higher than the sum of the amounts which
would be paid by several broadcasters for non-exclusive rights.
2. For the broadcaster, sports programmes are
considered as particularly suited to attracting a large number of viewers.
For them, it can be said that exclusivity represents :
the only way to guarantee the value of a given sports
programme;
the broadcasting company may get more value from the
rights if it can sub-license to competitors;
a way to build up audience, in the short as well as in
the long term (consolidation of audience base, fostering loyalty,
improvement of image);
a substantial increase in advertising or sponsorship
revenue as sports programmes are a means of targeting a specific audience,
often in large numbers;
a degree of prestige in being the only broadcaster
showing a particularly popular sport;
for pay-TV channels, exclusivity of rights to very
popular sports events is fundamental in order to attract new subscribers;
this is especially true for sports theme channels: persuading viewers with
specialised tastes to pay for specialised channels is the only way that
many such channels could be financed, since the number of interested
viewers would be too small to attract enough advertising revenue; it may
also be vital to re-coup investment in infrastructure;
the revenue may be needed by a broadcasting company
which wants to invest in cable, decoders and/or satellites.
3. Despite the very large amounts paid by broadcasters
for exclusive rights to the most popular sporting events, the purchases
are still profitable as long as the acquisition price is outweighed by
advertising or sponsorship revenue or subscription fees. Different types
of broadcasters, as defined by their method of financing (licence-fee,
advertising revenue, subscription etc) are be subject to differing
constraints upon their ability to bid for sports rights.
4. In the CODITEL II decision, the ECJ held that
exclusive licences of performing rights did not per se infringe Article
85(1), even though they conferred absolute territorial protection and
might prevent transmission into a neighbouring State. The Advocate General
had observed that since performing rights affect the supply of services
rather than goods and the doctrine of exhaustion was excluded by Coditel
(1), such exclusive licences would confer absolute territorial protection.
The ECJ concluded that the exercise of those rights may come within the
prohibition of Article 85(1) where, regard having been had to the specific
characteristics of that market, there are economic or legal circumstances
the effect of which is to restrict distribution to an appreciable degree.
Certain parallels could be drawn with the granting of exclusive licences
for broadcasting rights to sports events, which concern allowing a third
party access to land or property or to the participants for filming
purposes
5. Agreements for exclusivity may fall within the scope
of Article 85(1) if they lead to foreclosure. Duration should not be
excessive in length or scope. It is not possible to state what the maximum
duration should be, as much will depend on individual circumstances. The
effects of an exclusive licence will depend on market definition. The
market power of the seller and the acquirer and whether the downstream
market is likely to be foreclosed need to be assessed. The cumulative
effect of the acquisition of the right may strengthen an already strong
position of a broadcaster because it adds to an already attractive
portfolio of sports rights. The existence of a sublicensing policy cannot,
in itself, alter the need for an individual exemption in circumstances
where exclusivity is caught under Article 85(1).
6. Under current practices, the exclusivity granted can
vary significantly. It can apply to the live broadcasting of an entire
event; to a deferred transmission of an entire event, or for short clips
for use in sports programmes. (For the purposes of news reporting, it is
the general practice, often enshrined in national legislation, for short
clips of an event to be made available to all broadcasters on a
non-exclusive basis). It can also be limited to exploitation by any of the
different broadcasting modalities - in the clear broadcasting, pay-TV or
pay-per-view. Exclusivity for all means of exploitation can be granted to
a single operator, who either exploits some of the rights himself and
withdraws the remainder from the market, or who is prepared to sub-licence
other broadcasters on a live, deferred or highlight basis, according to
the different modalities. Alternatively, the right to broadcast through
only one modality can be granted only to one operator. Exclusivity can
also be granted to a number of operators each exploiting a particular
modality. The more forms of exclusive exploitation that are granted to
other broadcasters for a particular right or rights the more the strength
of each form of exclusivity is diluted, because there is an element of
competition for viewers between the various modalities.
7. There are circumstances when a long period of
exclusivity may be justified, for example to assist a new entrant becoming
established in the market (the "new entrant" rationale) and in
particular, a new entrant introducing new and expensive technology who
needs a long period of exclusivity in order to recover large investment
costs. "Introducing these new technologies may require exclusive
access to particular forms of sufficiently attractive content in order to
drive penetration and consumer investment into new reception equipment".
When considering the introduction of commercially new, high-risk and
potentially pro-competitive services as justification for the granting of
an exemption for a long period of exclusivity, a balancing needs to be
carried out under Article 85(3). This is particularly relevant when the
party is already powerful or the partners to an agreement or a joint
venture are already part of large, powerful groups.
IVII. Collective selling
1. The broadcasting rights to matches or competitions
are often marketed centrally, or sold in exclusive bundled form, by a
league or association representing the clubs or participants. At the
national level, this practice has being challenged under national cartel
law by competition authorities in The Netherlands, the UK and most
recently in Germany, where the Bundesgerichtsof concluded that the central
marketing of broadcasting rights to European Cup football matches by the
national football association was a cartel for which exemption was not
justified. If there exists an inter-state trade effect, it will be
necessary to examine whether the collective selling of rights to
broadcasting matches or to series of events or competitions results is an
agreement restrictive of competition contrary to Article 85(1) of the EC
Treaty and the Commission will have to examine whether the criteria for
exemption could nevertheless be met by the arrangements.
2. Before considering the question of the applicability
of Community competition law, the ownership of rights needs to be taken
into account as there is a danger that commercial agreements may collapse
in a dispute about ownership, as has been witnessed in the Netherlands.
The question of who owns the rights to broadcast any given event (or
series of events) is not one which can be answered by competition law. It
is a question governed by the applicable national law. The recent German
and Dutch court cases have suggested that in the arrangements they
examined in those Member States, the football clubs are primarily the
owners of the broadcasting rights to football matches.
3. As ever larger sums are paid for exclusive rights, it
is likely that disputes about ownership and the exercise of those rights
will increase. Leagues or associations at both the national and
international level are increasingly assuming the control and sale of
broadcasting rights to individual events or matches by change to their
constitutions or rules. The question of who owns the rights has to be
determined under national law. Criteria under national law for determining
ownership of broadcasting rights are different in different Member States.
Ownership can be based on various considerations, such the ownership of
land, "the arena rights" or who takes the commercial risk in
staging an event. Circumstances relating to the organisational structure
of each sport will have a bearing on determining ownership; these are
likely to be different for team sports such as football and rugby; series
in which a number of teams or individuals compete at several locations;
and events where there is one organiser but where a number of individuals
take part, such as marathons, or tennis tournaments. It may be necessary
for rights belonging to a number of contributors to the sport to be
transferred to the organiser responsible for the game or competition.
4. When considering collective selling or "central
marketing" arrangements, it may be relevant to recall:
the competitive situation in each circumstance has to be
evaluated, in order to avoid approving cartel-like arrangements which
could be contrary to Article 85(1), particularly when the participants are
capable of concluding their own contracts with broadcasters;
those assuming responsibility for selling the rights on
behalf of individual participants or events may enjoy a position of market
power, either already held as a result of a regulatory or supervisory
function, or gained as a result of the acquisition of a large number of
rights. If the acquisition, exercise or exploitation of those rights is
abused, Article 86 is likely to be applicable;
the conditions for international events may be different
to those for national events;
collective selling of broadcasting rights entails
providing a bundle of rights, which may or may not be capable of being
competitors to each other. The product may therefore be different to a
product supplied by a single rights holder.
5. Up until now, collective selling of broadcasting
rights by national leagues has been left by the Commission to be dealt
with under national competition law. No agreements for collective selling
had been notified to the Commission, and it was not clear whether there
was a significant affect on trade between Member States arising from some
of the arrangements which have been made so far. The Commission is
currently examining collective selling arrangements for international
motor sports.
6. If a competition authority does not permit collective
selling of sports rights for national events, a greater number of separate
rights will be available to broadcasters. Collective selling or central
marketing can be the source of other competition issues related to the
broadcasting of sports events.
7. Collective selling arrangements, if they cannot be
shown not to be a restriction of competition, are likely to affect the
functioning of the market, because they permit only periodic transactions,
restrict output and bundle the products offered. Collective selling can
facilitate other restrictive practices, such as granting a long duration
of exclusivity, giving preferential treatment to one set of rights at the
expense of another, or the denying of the rights to other broadcasters. It
could result in the hindering of the development of other sports or
participants in the sport, which as a consequence of preferential
treatment for some classes of participants, were not able to obtain
satisfactory television exposure or attract sponsors. Such restrictions on
output could in turn slow down the development of new broadcasting
technologies at the national and cross-border levels. The terms of the
agreements will affect the price broadcasters are willing to pay for the
rights. Whether the resulting restraints on competition are indispensable
to the functioning of the market would depend on all the circumstances.
8. Before it could be said whether such arrangements
fulfil the criteria for exemption under Article 85(3), a thorough
examination is required, first, of the extent of any restrictions of
competition under Article 85(1) that arise for the individual parties
concerned. Such restrictive agreements must Secondly, such restrictions
must be counter-balanced by meet the four criteria for exemption of
Article 85(3). The fulfilment of these criteria should not be based on
purely commercial considerations. The special characteristics of the sport
in question have to be taken into account. These could include, for
example, the need to ensure "solidarity" between weaker and
stronger participants or the training of young players, which could only
be achieved through redistribution of revenue from the sale of
broadcasting rights. Such aims would have to be a genuine and material
part of the objectives and ones which could not be achievable under less
restrictive arrangements.
IV. Sublicensing
1. If an agreement involving exclusivity for rights
gives the parties the possibility of eliminating competition in respect of
a substantial part of the products or services in question, a possible
remedy could be to require them to share with third parties the rights or
advantages they have obtained. This may be particularly relevant when the
owner of important rights is also their exploiter in a vertical joint
venture with a broadcaster. Sublicensing could therefore be necessary in
order to comply with Art. 85(3)(b) as a means of reducing the
anti-competitive affect of exclusivity or of joint buying of sports
rights. For certain events, such as the Olympics, sublicensing may be the
only fair and competitive way to deal with exclusivity. Before considering
arrangements for sublicensing under competition law, it should first be
established whether the exclusivity is justified.
2. Sublicensing should not be regarded as a solution to
all the competition issues which arise. In most cases it will be necessary
and sufficient to deal with, for example, exclusivity which is of an
excessive duration or scope. To be effective, the value of sublicensing
will depend on the terms on which sublicenses are granted. These should be
known, as far as possible, in advance, because the value of the exclusive
rights to the company obtaining them depends on any duty to sublicence
which it may have. The terms of sublicences should be transparent. They
should be non-discriminatory as between licensees in each category. Where
the price of the sublicences is unregulated, this may result in prices at
monopoly levels and it is not desirable for a competition authority to
allow the broadcaster to obtain exclusive rights and then charge other
broadcasters monopoly prices. Another adverse consequence could be that of
excluding small-scale entry. "Terms" must deal with payment,
access to unedited material, embargoes on live transmission or on
transmission at popular times, and subject matter (interest and importance
of the games or events sublicensed). There should be provision for
settlement of disputes. There may be different categories of sublicences.
The advantages obtained by the parties in comparison with the sublicense
must be proportionate, so that sublicences are of real value to the
licensees : the owner of the exclusive rights may not keep all the
valuable rights for itself.
3. The Commission will not fix the terms of sublicences,
and may not find it easy to ensure that the terms are reasonable. In
summary, encouraging sublicensing is not by itself either a satisfactory
or a convenient way of solving the competition problems of sports
broadcasting.
VI. Collective purchasing by broadcasting companies
1. Broadcasting companies sometimes join together to
acquire the right to broadcast sports events. Whether this kind of
collective buying falls under Article 85(1), and in what circumstances it
fulfils the requirements of Article 85(3), depends on all the
circumstances. For example, whether such arrangements are anti-competitive
will depend, inter alia, on whether the parties are found to be important
competitors with a strong position in the relevant market, and the scope
and duration of the exclusive rights purchased. In particular, c
Collective purchasing will not raise competition problems if no one member
of the group alone would have the resources to bid successfully for any of
the rights in question, or where a number of small broadcasters come
together which each, individually, have no possibility of acquiring the
rights in question. , as no restriction of competition would occur
2. Where collective purchasing is caught under Article
85(1), exemption can be envisaged if its purpose is pro-competitive, for
example, by maintaining a broadcasting sector with limited resources
facing the big four broadcasters, BSkyB, Canal Plus, Bertelsmann and
Kirch, on the market for the procurement of broadcasting rights, or for
events of major national public importance, such as the Olympic games.
3. The removal of joint selling arrangements will
minimise the need for collective purchasing.
IV. Priority for free-access television
1. There are advantages for viewers if important sports
rights are broadcast by free-access television, so that consumers are not
obliged to make additional payments for decoders, receiving equipment or
cable subscription to view such events, in particular, those in which
their compatriot sports men and women take part in international events.
2. More generally, concern has arisen, with the growth
and development of pay-TV, that viewers are being denied free-access to
important national events because large subscription broadcasters have
been buying up those rights to develop their own services. It is said that
some sporting events are of such national or heritage importance, that
they reflect common identity and value, so that broad free access should
be given to them. The complaints are from "public interest" or "national
heritage" concern, rather than on competition grounds, and a
regulatory approach would be necessary to achieve the desired result.
3. Competition law is not the right instrument for
achieving cultural or regulatory aims. As confirmed by the Eurovision
judgement, competition rules are neutral with respect to different types
of broadcasting and in principle, do not provide a legal base for
favouring one category of broadcaster over others.
4. Further to an amendment by the European Parliament,
the directive modifying directive 89/552/EEC ("television without
frontiers") includes a new Article 3A. The purpose of this Article is
explained in recital 18 which reads as follows :
"Whereas it is essential that Member States should
be able to take measures to protect the right to information and to ensure
wide access by the public to television coverage of national or
non-national events of major importance for society, such as the Olympic
Games, the football World Cup and the European football Championship;
whereas to this end Member States retain the right to take measures
compatible with Community law aimed at regulating the exercise by
broadcasters under their jurisdiction of exclusive broadcasting rights to
such events".
5. Article 3A paragraph 3 stipulates, moreover, that
Member States shall ensure that broadcasters under their jurisdiction do
not exercise the exclusive rights purchased by those broadcasters in such
a way that a substantial proportion of the public in another Member State
is deprived of the possibility of following events, which are designated
by that other Member State, on free television. According to information
supplied to the Commission by national delegations to the Contact
Committee set up by the Directive, a large majority of Member States
intend to notify their measures taken under Article 3A paragraph 1 in the
course of 1998. All Member States have indicated timetables for
transposition of Article 3A paragraph 3 by the deadline required by the
Directive, i.e. 30 December 1998.
6. The procedure laid down in Article 3A paragraph 2
requires the Member States to notify their measures and the Commission to
verify their compatibility with Community law within a period of three
months. The Commission must seek the opinion of the Committee established
by the Directive. Measures taken by Member States in order to guarantee
the availability of coverage of certain events must be in accordance inter
alia with Article 90 of the Treaty, and in particular with the principle
of proportionality.
* * *
This paper only intends to lay down some broad lines
identified to date for the application of competition law in a sector in
which the structure and economics are very complex and which is the
subject of continuous and very rapid developments. Practice in relation to
Articles 85 and 86 will be developed by the Commission on a case-by-case
basis., within the framework of specific cases.
Footnotes:
- For aspects other than those related to competition
law, see the Communication from Mr Oreja to the Commission entitled "Exclusive
Rights for TV Broadcasting of Major (sports) Events" (SEC(97) 174
final.
- The High Court of Amsterdam verdict of 8 November 1996
(on Feyenoord's appeal against the President of the Utrecht court's
previous verdict) was that the television rights in principle belong to
the home team and that the statutes of the KNVB are too general to be
interpreted as an assignment of the broadcasting rights to the KNVB.
- Decision of the Bundesgerichtshof 11 December 1997 in
case Deutscher Fußball-Bund, UFA Film and ISPR v Bundeskartellamt
took the view that teams are the natural owners of the broadcasting rights
in the games in question, but left open the question of whether
associations may also have a claim to ownership in different
circumstances.
- C-415/93, 15 December 1995
-- Joined Cases T-528/93, T-542/93, T-543/93 and T-546/93,
judgement of the Court of First Instance of 11 July 1996
- Directive 97/36/EC of the European Parliament and of
the Council of 30 June 1997 amending Council Directive 89/552/EEC on the
co-ordination of certain provisions laid down by law, regulation or
administrative action in Member States concerning the pursuit of
television broadcasting activities (OJ No L202/60 of 30.7.1997)
- Convergence within the media industry, and between
media, information technology and/or telecommunications - Prospective for
competition and competition policy - Report to DGIV prepared by London
Economics
- Decision of 23 December 1997
- OJ C 372, 9 December 1997
- Case 262/81
- Convergence within the media industry, and between
media, information and technology and/or telecommunications - Prospective
for competition and competition policy - Report to DG IV prepared by
London Economics
- The Ministry for Economic Affairs took the view on 6
November 1996 that the collective selling by the KNVB to Sport 7 of the
broadcasting rights to matches was a cartel. On 28 December 1997 the
Ministry issued a decision that the collective selling of highlights of
soccer games was a restriction of competition but gave it a temporary and
transitional exemption, on the basis of public interest considerations, in
order not to disrepute the market.
-Hearing of the Restrictive Practices Court in January
1999 of the collective selling by the Premier League of broadcasting
rights to the clubs matches
- Decision of the Bundesgerichtshof 11 December 1997 in
case Deutscher Fußball-Bund, UFA Film and ISPR v Bundeskartellamt
- Joined Cases T-528/93, T-542/93, T-543/93 and T-546/93,
judgement of the Court of First Instance of 11 July 1996
- Directive 97/36/EC of the European Parliament and of
the Council of 30 June 1997 amending Council Directive 89/552/EEC on the
co-ordination of certain provisions laid down by law, regulation or
administrative action in Member States concerning the pursuit of
television broadcasting activities (OJ No L202/60 of 30.7.1997)
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