EU Court Rules Against Exclusive TV Licensing Deal

First time accepted submitter r5r5 writes "In possibly a ground-breaking rule, European Court of Justice ruled against exclusive rights to broadcast sporting events within a single member state. The motivation is that such an agreement would enable each broadcaster to be granted absolute territorial exclusivity in the area covered by its licence and would therefore eliminate all competition between broadcasters in the field of those services and would thus partition the national markets in accordance with national borders. Could this be the beginning of dismounting the legacy system of exclusive distribution rights awarded to one company in one state?"

Comments

The point of the ruling...

[Richard_at_work]

Is to support the legal position that a citizen of an EU member state cannot be restricted from purchasing goods or services from any other member state - this is a rule that has been in position for years, and the FA were trying to have it not applied to their TV rights (as they gain billions from UK tv rights to Sky, which are now massively devalued).

It doesn't affect purchases of goods and services from outside of the EU.

Apple underwent a similar issue a few years ago over their iTunes store restrictions within the EU.

Re:The point of the ruling...

[jimicus]

Just to clarify, the reason why this is so important has little to do with individuals buying the sports channels and everything to do with venues that want to show them.

The UK only has one satellite broadcaster - Sky - and that satellite broadcaster has an exclusive deal with the Football Association for broadcast of UK football matches. Anyone wanting to watch a UK football match on the TV basically has to watch it on Sky. (Those using cable instead of satellite, the cable company pays Sky and pushes the same channel over the cable).

A normal Sky subscription comes with a contract that states "You're not allowed to use this for a public showing of an event" - pubs are meant to contact Sky to purchase a special subscription that has no such restriction in the contract. That subscription's something like ten times the price of the one sold to domestic customers - and lots of pubs simply don't have the turnover to buy something for ten times the price.

So a lot of pubs have either bought a domestic subscription and hoped nobody notices - or a subscription from a satellite broadcaster based in continental Europe (who don't charge absurdly expensive prices). Surprise surprise, Sky went ballistic. They had an exclusive license to be the only broadcaster in the UK which this sort of thing undermines; they've been using every bullying tactic in the book to force pubs to buy the UK commercial subscription and now they can't.

TV and football... Balance of power

[Oswald McWeany]

A quick note to catch the Americans up on what matters most in the world:

Pubs in Britain had to pay more to show English games than pubs overseas because Sky (who held the British rights) charged more.

English football league is the richest in the world (most watched sports league in the world as a result)- in part because the TV money is so much higher there so it gets the best quality players.
A certain % of Sky's money there goes back to the clubs.

The English league will now lose some of the monetary advantage it had because Sky will have to compete with cheapo-European networks.

Recently Liverpool Football Club asked to be able to negotiate their own TV rights outside of the league. Their argument : we're a big club- we have more fans- more people turn on the telly to watch us than some of the smaller clubs- we should get more money than smaller clubs that no-one watches.

This was quickly shot down by everyone else who said it was a terrible idea. ESPECIALLY from the smaller clubs who would as a result get less money- but even some of the big clubs who would get more money as a result were not in favour.

This is actually how it works in Spain- where clubs like Real Madrid, and Barcelona have budgets that dwarf anyone else. Real Madrid and Barca are the big teams- they negotiate their own TV deals- and as a result have been (even before now) making more money than even the English teams- despite the Spanish league being poorer (wealthwise) in general.

Liverpool have a point though- now England is losing their advantage as a league- Real Madrid and Barcelona are going to have way more money than any club in England- because they get to negotiate their own deals. Being in England is no longer an advantage- so the wealth gap to the big Spanish teams will grow.

The tide of power that had been in England for a number of years is now going to shift back to Spain again because their clubs will have much bigger budgets.