Pubs v Premier League – FA Football on Satellite TV decision tomorrow
In the 19 years since the formation of the Premier League, the value of the competition’s television rights has gone from £304m to a staggering £3.2bn.
It is one of the country’s most successful exports and whenever Prime Minister David Cameron goes on trade missions abroad, as he did to Russia last month; he often takes chief executive Richard Scudamore with him as an example of a thriving British business.
And yet on Tuesday the European Court of Justice (ECJ) will deliver a ruling which could deal the League and its lucrative TV rights model a major blow.
Unlikely though it might seem, the case all centres on a Portsmouth pub, the Red, White and Blue, and its landlady, Karen Murphy. She was fined back in 2006 for showing her customers live Premier League matches accessed via a Greek service and an illegal decoder.
The Premier League states UK citizens should only be able to watch live matches through Sky and, to a lesser extent, ESPN. For pubs the cost of screening matches is high, making it attractive for them to look for cheaper alternatives.
Mrs Murphy appealed against the decision saying that the European Union’s laws on the free movement of trade and services inside the single market meant she should be entitled to buy her live football from any European country she should choose.
In March, a non-binding opinion from the ECJ’s advocate general Juliane Kokot seemed to back her argument. Kokot stated that broadcasters cannot stop customers using cheaper foreign satellite TV services.
There is no guarantee that the court will follow that opinion tomorrow. But even senior Premier League sources admit it is unlikely that it will go against it.
So what does this potentially mean to the League and Sky, whose business model is so reliant on live top flight football?
The first thing to say is that tomorrow’s decision is unlikely to be clear cut. Although the Kokot advice was interpreted as a potential setback for the League’s case, the League argues it was much more complicated than that.
And even if the court delivers a clear judgment, it is only guidance for the UK High Court, which must then decide whether to rubber stamp its findings.
The next point to make is that the impact on the League’s rights in Europe is likely to be negligible. Of the £1.4bn it earns from selling its rights abroad, just £130m, less than 10 per cent, comes from Europe.
The big problem is a free for all in the UK market could seriously damage Sky’s exclusivity for which it pays £1.8bn over the three years 2010-2013. Why would Sky continue to pay that money – money which underpins clubs’ vast spending on players’ wages and salaries every year – if foreign broadcasters are given the freedom to undercut them.
In response to such a verdict Sky might feel the need to lower their prices and therefore pay less to the League for its rights. That could have a massive knock-on effect on clubs who are already stretched.
However the League and its principal adviser on TV rights David Kogan have become adept at hurdling obstacles put in their path by regulators.
In the event of a ruling which backs Mrs Murphy’s appeal, the League is likely to create one Europe-wide live TV rights package which Sky or another pan-European broadcaster could buy for the same sort of money Sky currently pay, if not more. They could then either show it on the continent themselves or sub licence to foreign TV companies.
The League, which wants to start its latest auction for the 2013-2016 package before the end of the season, is therefore confident that whatever the outcome tomorrow, its business model will continue to thrive.
But the impact on smaller sports could be significant as the markets for their rights will shrink. And the effect on other creative sectors like the film industry, which also sells exclusive content territory by territory, could be devastating.
Looking a bit further ahead the much bigger danger for football, indeed all sports, is the rapid blurring of the lines between distribution and access to live sport.
Rights holders used to be able to sell rights platform by platform – TV, radio, online, mobile and so on. But it’s already difficult to tell the difference between a traditional TV and an iPad.
That will only become more blurred in the future and in response it has become necessary for rights holders to develop time sensitive packages with media companies now bidding for live, near live, highlights and archive rights.
For the Premier League and other big rights holders protecting those in the face of illegal streaming of matches from pirate websites is a far bigger threat than the ECJ’s ruling tomorrow.
source: bbc.co.uk/blogs/davidbond/2011/10/pubs_v_premier_league.html
Comments
Pubs v Premier League – FA Football on Satellite TV decision tomorrow — No Comments
HTML tags allowed in your comment: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>