Gabriel Marín

Evolution of broadcasting landscape/ rights in football in football

Introduction

A quarter of a century ago, football clubs derived 90 % or more of their revenues from fans spending money at the stadium, mostly in the form of tickets (Szymanski 2015). The primary source of revenue was gate money. Nowadays, according to Deloitte, less than 20 % of revenue in the “big five” European leagues (England, Spain, France, Germany, Italy) comes from matchday. In contrast, broadcast revenue accounted for more than half of Premier League (PL) clubs’ total revenue and, at £1.9bn in 2015/16, had almost doubled since 2008/09. This is a major break with tradition and illustrates how broadcasting is a key element in football today. Therefore, it is important to understand the evolution of broadcasting, the actors involved, the selling process and the legal environment that surrounds broadcasting.

Broadcasting rights definition

In the Premier League context (the top level of English football) broadcasting rights are arrangements put in place by the football clubs in the league for the exploitation in the United Kingdom of media rights to Premier League matches. "Media rights" means the rights to make available audio-visual content of play during Premier League matches in any form and using any method of transmission or distribution. The FAPL (the body representing all of the individual clubs) sells the media rights pertaining to Premier League Matches — notably television, radio, internet and mobile rights — on the clubs' behalf, both in the United Kingdom and throughout the world.

Historical context

Traditional analogue broadcasting involved transmitting a signal from TV masts that could be picked up by any aerial within reach. The technology gave the signal for free (free-to-air TV), and the number of channels that could be broadcast was limited. In this context of limited competition, broadcasters were unwilling to pay large sums for the right to show football matches. Additionally, clubs feared that football on TV would provide a more comfortable alternative to going to the game and so cannibalize their most important revenue source, gate money. This resulted in little league football on TV in Europe, at least in the country where the games were played (English clubs were willing to sell their games to overseas broadcasters).
The digital revolution in the 1980s meant a transition to a subscription model, where the signal could be delivered by cable or by satellite. The broadcasting companies that used football to drive their subscriptions had enormous incentives to promote the sport, and the exposure given to football entailed a growing interest for the game both domestically and globally.  Broadcasters wanted subscriptions not only from households but from pubs that favoured football as a way to sell more beer.

Murphy v FAPL

As broadcasters charged larger and larger amounts for subscriptions, individuals and pubs tried to find ways to avoid having to pay these.  The case Murphy and QC Leisure illustrates this point. Ms Murphy (a pub owner) purchased a decoder from QC Leisure (stockist and supplier of foreign decoders) from the authorised PL broadcaster in Greece and broadcasted live matches in her pub. The FAPL brought legal action against Ms Murphy and QC Leisure. In this case, two legal matters arise. On one hand, the freedom to provide and purchase broadcasting services (in the form of decoder cards) from other member states of the EU; pertaining to competition law (Article 101 TFEU) and free movement of services (Article 56 TFEU). On the other hand, the matter of whether the broadcasting of these matches was a copyright infringement (EU Directive 2011/29/EC -the “Copyright Directive”; Copyright, Designs and Patents Act 1998).

 The Court of Justice of the EU holds that national legislation which prohibits the import, sale or use of foreign decoder cards is contrary to the freedom to provide services and cannot be justified either in light of the objective of protecting intellectual property rights or by the objective of encouraging the public to attend football stadiums. As an individual consumer, for non-commercial use, you are allowed to go to any other member state to purchase a decoder card.

Concerning the interpretation of the Copyright Directive only the opening video sequence, the PL anthem, pre-recorded films showing highlights of recent PL matches and various graphics can be regarded as ‘works’ and are therefore protected by copyright (matches themselves are not works enjoying such protection). That being so, the Court decided that transmission in a pub of the broadcasts containing those protected works, constitutes a ‘communication to the public’ within the meaning of the copyright directive, for which the authorisation of the author of the works is necessary. Indeed, when a pub transmits those works to the customers present on the premises the works are transmitted to an additional public which was not considered by the authors when they authorised the broadcasting of their works.

Another similar case, FA Premier League Ltd v Luxton [2016] confirmed previous resolutions. Indeed, sports rights holders will still be unable to prevent the importation of foreign decoder cards in order to view live sport. However, the use of a domestic decoder card in a commercial setting amounts to an infringement of the rights holder's copyright, regardless of whether that card was purchased in the UK or abroad. Therefore, the FAPL - and sports rights holders in general -  have the right to prevent the unauthorized communication of their copyright material to the public.

It is important to distinguish this cases from piracy. What is certainly not permitted is the ability of an intermediary to steal a feed, upload it to a website and stream it live (internet piracy).

Premium events

The Broadcasting Act 1996, (the ‘Act’) as amended by the Television Broadcasting Regulations 2000 and the Communications Act 2003, requires Ofcom to draw up, and from time to time review, a code giving guidance on certain matters relating to the televising of sports and other events of national interest which have been listed by the Secretary of State for Culture Media and Sport.

The Act restricts the acquisition by television programme providers of exclusive rights  to television coverage of listed events and the broadcasting on an exclusive basis of such coverage without the previous consent of Ofcom. These listed events have to be shown on free to air television. In England, they include The Olympic Games, the Wimbledon Finals and the Derby, among others.

This protection of listed events has been challenged in court by FIFA and UEFA. UEFA challenged the European Commission’s decision to approve the listing of the UEFA European Championship finals tournament by the UK government, whilst FIFA challenged the listing of the entire 64 matches of the FIFA World Cup by both the Belgian and the UK governments. UEFA and FIFA contended that they could not effectively maximise their broadcasting revenues because they were constrained as to the broadcasters to whom they could sell the broadcasts (i.e terrestrial) - shielding them from external competition. Such restrictions relate to European legislation (Television Without Frontiers Directive, as amended by the Audio-Visual Media Services Directive) which safeguards a European citizen’s right to access to events of national significance. The argument advanced by both governing bodies was that matches not involving national teams (i.e British National teams or Belgian national team) should not be considered as of national significance and therefore not protected by these restrictions. The General Court rejected this argument, saying that these competitions may be regarded as single events rather than as a series of individual events, and that matches not involving national teams could actually impact their sporting success (e.g. in the group stage), thus holding significance to the public. This case reflects the inherent tension between a government’s duty to safeguard certain sporting and cultural events and the need for a robust and competitive market in the sale of live sports rights.

Dimensions concerning clubs / Selling process

The main issue has been how to divide the money. In Europe, where a big divide exists between big and small clubs, the former wanted negotiations on an individual basis while the latter favoured a revenue shared equally. Most football leagues agreed to a comprise formula that shared some of the money equally but still reserved a larger share for the more successful teams. In the Premier League, money from domestic rights sales was divided by 50 % on the basis of equal shares, 25 % on the basis of league position and 25 % on the basis of number of times shown on TV. On the other hand, overseas broadcast rights are divided equally.

Some concerns arise over clubs collectively selling the rights, limiting the number of games televised and the packages of the rights. The EU Commission intervenes to ensure more competition for broadcasters with multiple packages on offer, that no broadcaster will be allowed to buy all the broadcasting packages and that the contracts last for no more than three years. On the other hand, when individual clubs negotiate their rights as in Spain, the rich/ best teams reinforce their position as they get disproportionate broadcasting fees comparing with other teams in the league.

Conclusion

Sport as a TV product is still one of the most appealing products, there is no real substitute for it for many viewers. As it is “instantly perishable”, in the sense that viewers are willing to pay a premium for live coverage, it stands apart from other products. However, the premium TV broadcasters charge to consumers is sometimes excessive, leading to allegations of uncompetitive behaviour and to consumers trying to avoid paying those fees (through purchase of foreign decoders or through piracy streaming). Precisely for the protection of consumers, some governments have put in place a list of events that have to be in free to air television. Regarding clubs,