Should EURO 2012 be broadcast free of charge to all European citizens?

Introduction and Executive Summary

With the European Championship (EUROs) starting on Friday, I thought it may be topical to briefly discuss some of the ongoing broadcasting rights issues associated with the EUROs and the World Cup.

Last year UEFA and FIFA failed in an action challenging the ‘listing’ of the EUROs and World Cup as events of national importance. UEFA contended that they could not effectively maximise their broadcasting revenues for the World Cup and EUROs because they were constrained as to the broadcasters to whom they could sell the broadcasts.

In three separate cases, UEFA and FIFA brought actions before the European courts relating to the way its broadcasting rights can be marketed in Belgium and the UK. In particular, the UK listed every match in the EUROs as being of national significance. That practically meant that only terrestrial broadcasters could bid to screen the EUROs.  UEFA challenged this decision.

What is apparent throughout the three decisions is 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.

Brief Legal Background

The EU’s Audio Visual Media Services Directive, provides the legal basis for Member States to compile lists of cultural events that are of major importance to it citizens.

It should be noted that there is no obligation on Member States to introduce listed events legislation. From previous research conducted last year, only Austria, Belgium, Finland, France, Germany, Ireland, Italy and the UK had a list system in place. The only constant in each of the submitted Member State lists are the World Cup and European Championships. Crucially, the UK list reserves every World Cup and EURO match collectively as broadcasts of major cultural importance to the UK. The protected events lists are then submitted to the Commission. The Commission then decides whether the listing of events in question complies with EU law.

The Challenge

UEFA challenged the Commission’s Decision to approve the UK’s listing of the entire EUROs, arguing amongst other things, that it shielded terrestrial broadcasters from effective pay-TV competition. This was apparently to the detriment and exclusion of pay-TV channel operators. UEFA as a result could not maximise their revenues.

The Decision

The court decided that the EUROs and World Cup could be listed in their entirety. Specifically, the court stated the following:

  1. all EURO and World Cup games could be listed by the UK government even if the game did not involve a home nations team. This begs the question as to how many UK viewers would deem a EUROs match between Ukraine v France as of cultural significance to the UK? However, if in the EUROs Ukraine v France was the determining fixture to decide whether England goes through to the knock-out stages of the competition, there would certainly be an argument for that game being of cultural significance. The context of the game therefore becomes very important and something that could not be easily catered for before a tournament began.
  2. the entitlement of a UK citizen to watch the complete tournament unravelling on a free-to-air, non-pay TV broadcast channel, is viewed by many as an inherent right. The expectation of not having to pay to watch live football which UK viewers have traditionally watched for free does hold some merit when one considers that the hugely popular Premier League and Champions League competitions are not protected under the UK list at all.
  3. a reduction in broadcaster competition would not destroy the value of the rights. If the rights holder decides to sell them on an exclusive basis then it understands such an exclusive arrangement can only be entered into with a relevant terrestrial broadcaster.

Conclusion

UEFA and FIFA have announced that they will appeal the European Court’s decision to the highest European Court. It remains to be seen whether they will be successful in bringing such an action. Either way, it brings into focus the play-off between live premium football remaining on terrestrial television against a rights holder’s ability to extract maximum return to re-invest back into their sport.

I doubt there will be too many citizens complaining about having live premium football matches on terrestrial television this summer. Football fans should be happy. Rights holders less so.

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