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European Court ruling likely to change Football broadcasting rights forever... 4 Oct 11 The European Court of Justice (ECJ) has now delivered its groundbreaking judgment in the case of The Football Association Premier League and Others more >
Advocate General puts the boot into football broadcasting rights... 7 Feb 11 SMITHFIELD PARTNERS represent QC Leisure, David Richardson and SR Leisure Limited, all of whom are Defendants to a civil action brought by the more >
European Court ruling likely to change Football broadcasting rights forever...
The European Court of Justice (ECJ) has now delivered its groundbreaking judgment in the case of The Football Association Premier League and Others -v- QC Leisure and Others and MPS -v- Karen Murphy, which were joined together for the purposes of their references to the ECJ.
What is the case about?
Smithfield Partners represent Mr David Richardson of QC Leisure, which supplies decoder cards imported into the UK and also SR Leisure Limited, which was one of the publicans who purchased the system showing live football matches. Both of our clients were sued by FAPL in the High Court. Throughout the case we remained convinced that the FAPL’s distribution of broadcasting rights and their attempts to enforce those rights, are not consistent with the fundamental European principles of free movement of services between Member States. In addition, it has been our view that the clauses contained in the licence agreements between the FAPL and various host broadcasters, clearly restrict competition and so are also in breach of European Union law. We have also raised a number of arguments relating to intellectual property rights.
The civil case brought against our clients was joined with the criminal action taken against Karen Murphy, another publican who purchased the system.
What does the ruling say?
The Judgment is groundbreaking, at least in as far as its potential impact on football but also in its potential application to broadcasting rights in general within the EU. The first key decision relates to the free movement of services. The ECJ agreed with our position and stated that any national legislation (in this case in the UK) which tries to prevent the import, sale or use of foreign decoder cards is unlawful and, moreover, cannot be justified.
An important point to highlight here is the ECJ’s approach to justification. The law states that it may be possible to prohibit free movement, only if it can be justified. There were really two possible justifications here, firstly to protect intellectual property rights and, secondly, for sporting reasons.
FAPL is not the creator of the football match itself and as such it cannot assert any copyright. The ECJ stated:
"FAPL cannot claim copyright in the Premier League matches themselves, as they cannot be classified as works.... Accordingly, those events cannot be protected under copyright. It is, moreover, undisputed that European Union law does not protect them on any other basis in the field of intellectual property."
The ECJ, although recognising the specificity of sport and the unique nature of sporting events, was equally dismissive of the FAPL’s claim that such a restriction can be justified for sporting reasons, such as to protect stadium attendances. We argued on behalf of the Defendants that the contractual clauses preventing the importation of cards between member states had the object or effect of distorting competition. The ECJ did not even have to consider whether the clauses had that effect in practice, ruling that the actual object of the clause was anti-competitive. The ECJ stated:
"Such clauses prohibit the broadcasters from effecting any cross-border provision of services that relates to those matches, which enables each broadcaster to be granted absolute territorial exclusivity in the area covered by its licence and, thus, all competition between broadcasters in the field of those services to be eliminated."
What does it mean for the Premier league and for pub owners?
FAPL will have to reconsider the agreements which they currently have in place with the host broadcasters. These agreements have been ruled anti-competitive and have the effect of partitioning the internal market and in particular the clauses contained in those agreements which relate to territorial exclusivity cannot be enforced or relied upon. We suspect they may have to re-negotiate their terms with Sky and other broadcasters for the period remaining under their agreements. Another possible outcome might be that broadcasting rights to all premier league matches are auctioned on a pan-european basis. The irony is, that whilst Sky may lose out in the short term, there are only a few entities that have the logistical capabilities to service a pan European wide licence. Sky is one of those, and subject to future competition clearances, they may well dominate this new market. It will also be interesting to see who their competitors will be, we suspect multinationals will look to diversify into broadcasting.
In terms of the case going forward, the ECJ did rule that certain aspects of the broadcasts (such as the logo used and the anthem) may have some copyright protection and so there will need to be consideration of the impact of that prior to the next hearing back in the High Court, where Mr Justice Kitchin will have to decide on the practical implications of the ECJ decision. Importantly however, the ECJ specifically ruled that FAPL cannot claim any right in the broadcast of the live football match itself.
What is the effect on consumers and the people that Smithfield Partners are representing?
It’s really it a bit too soon to tell. A lot will depend on the final Judgment of the High Court and on the action of FAPL. It does seem pretty clear however that this case will lead to an increase in competition which usually results in more choice and cheaper prices for consumers. The impact on the financial world of football (and on broadcasting rights in general) is likely to be huge and this case is probably the Bosman of our time.
Will this case have any impact on other areas?
Yes, it’s very likely that the implications of this case will reach wider than that of football broadcasting. All content owners who wish to licence their rights on an exclusive basis within the European Union, will need to think carefully about how those licence agreements are drafted if they wish to maintain and enforce territorial exclusivity.
Martin Ochs Solicitor, Smithfield Partners
Smithfield Partners in the Media
Sanjay Nijran, a Sports Lawyer with Smithfield Partners was asked to appear live on CNN in order to speak about the case and its impact.
This article is intended for general guidance only and should not be relied upon without detailed legal advice on your specific circumstances, which we will be pleased to provide.
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