Simpler than the Offside Rule? Intra-Brand Competition in Premium Football TV Rights

(by Andreas Stephan) Why should an English pub landlady not be able to view English Premier League games using a Greek satellite subscription? Last week, Advocate General Juliane Kokott delivered her opinion on a competition law battle between two formidable groups – the FA Premier League and English pub landlords and landladies.  Although the case concerns Karen Murphy, the proprietor of the ‘Red, White and Blue’ pub in Portsmouth, hundreds of other pub proprietors keenly await the outcome of this test case.

Ms Murphy refused to pay Sky the £500 per month they charge for a pub broadcast subscription to live Premier League matches in the UK, so she instead subscribed to Greek satellite provider Nova, who offer an equivalent subscription for €800 per year. Normally broadcasting rights are split between countries due to differences in language commentary. However, many Greeks speak English (many fell in love with English Football while studying in the UK) and enjoy watching the matches with English commentary, along with the many British expatriates who live and holiday in Greece. Ms Murphy is being sued by a marketing organisation representing the interests of the 20 English Premier League Clubs. She was ordered to pay a fine by an English Court and has appealed to the European Courts of Justice.

The FA Premier League has hit choppy antitrust waters before. In March 2006 the Commission accepted Article 9 (Reg 1/2003) commitments in relation to the collusion (ahem… collective selling of media rights) through the FA, in lieu of the finding of an infringement of competition law. These included selling live TV rights in six packages, with no one buyer able to buy more than five. This compromise (over which the then Chancellor Gordon Brown apparently had some influence), was thought to strike a sensible balance between competition, the interests of the clubs and consumers. In consultations, many viewers indicated they preferred to get all the premiership coverage from one subscription (even if a little more expensive) than having to subscribe to several different satellite and cable providers. Indeed, this could actually work out more expensive depending on how the providers packaged the coverage.  Nevertheless, Sky ended up with most of the rights and customer prices remained high.

Back to the present case.  AG Kokott rightly pointed out that country-specific exclusivity rights have the effect of partitioning the internal market into quite separate national markets, something which constitutes a serious impairment of the freedom to provide services across the EU. There is no specific right to charge different prices for a work in each Member State. Allowing the FA to challenge the use of a Greek subscription, simply because it is cheaper than the UK equivalent, is incompatible with the logic and objectives of the Single Market.

Competition law is only one dimension to this case (there are issues relating to media and IP rights which really are more complicated than the offside rule) and we await the final decision of the ECJ. In an industry where inter-brand competition is almost non-existent, intra-brand competition between satellite producers is surely to be encouraged? Many within the FA will argue that such competition would starve many English clubs of funds and drive the best players to other countries. Although many clubs do have serious financial problems, it is difficult to feel sympathy in the wake of £50 million transfers of players. As for the prospect of the best footballers fleeing for clubs abroad, maybe they can keep the bankers company in the business class departure lounge.

However, as the sale of football rights is essentially cartelised, a victory by Ms Murphy is likely to be short lived. If the FA are not allowed to price discriminate between EU countries, they will simply force a rise in the subscription cost in Greece to match the £500 a month charged in the UK. This will still result in some reduction in income, and will be bad for Greek consumers – many of whom frequent cafes and restaurants with significantly lower turnover than English pubs.

One Response to Simpler than the Offside Rule? Intra-Brand Competition in Premium Football TV Rights

  1. Yesterday (4 October 2011), the European Court of Justice ruled in favour of Karen Murphy, holding that national laws which prohibit the import, sale or use of foreign decoder cards are contrary to the freedom to provide services within the European Union. http://www.bbc.co.uk/news/business-15162241

    It is unclear how far reaching the decision will be, in particular whether it extends to copyright law or is simply restricted to the buying and use of a decoder. The Premier League may simply be able to circumvent the ruling by displaying its logo (which unlike the live coverage) is subject to copyright. Alternatively, it could issue only a pan-european license to Sky to protect UK revenues, as these constitute the majority of their income.

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