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Champions League—Application to Collective Selling at National Level

It was mentioned earlier, in section 11.4, in connection with the analysis of exclusive selling, that the Commission followed up its decision in Champions League with investigation of the sale of rights to matches in the German Bundesliga and the English Premier League, to which it applied a similar approach to that adopted in Champions League. Collective selling of rights is the norm in both the Bundesliga and the FAPL, and on this point too Champions League paved the way for the Commission’s treatment of the German and English practices.

In fact, even in advance of the Commission’s Decision in 2003 on UEFA’s arrangements for collective selling of rights to broadcast the Champions League, there had been some inquiry into selling by national leagues pursuant to national competition laws. In Germany, collective selling in the Bundesliga was condemned by the competition authorities but subsequently granted statutory approval.96 The matter was also examined at some length by the UK’s Restrictive Practices Court in its 1999 ruling which found in favour of the legality of collective selling arrangements practised within the English (football) Premier League^7 This, however, was decided under the antiquated and subsequently repealed Restrictive Trade Practices Act 1976, now replaced by the Competition Act 1998 which is closely aligned with the EU model. In the wake of Champions League, collective selling at national level came to be reconsidered in the light of EU law.

In the case of the German Bundesliga the Commission’s inquiry resulted in commitments to loosen the prevailing form of collective selling. These were made legally binding in the form of a Commission decision.98 The Commission took the same approach to the finding of a restriction on competition as it had in Champions League. The central marketing and sale of media rights to matches in the Bundesliga restricted competition in the sense that it meant that the clubs had surrendered their right to sell rights on an individual basis. In consequence an adverse effect was exerted on downstream markets in television and in new media and the Commission expressly noted the importance in this regard of supplying football content.99 The geographical market was defined by applicable national law, the language and cultural characteristics, and was confined to Germany and potentially also German-speaking areas.100

The key commitments made by the Bundesliga which persuaded the Commission to show a green light focused on the offer of nine distinct packages of rights to be offered on a transparent and non-discriminatory basis and subject to a duration that would not exceed three years.ioiThe aim was to sustain competition in the broadcasting market and the Commission was satisfied that the arrangements would ‘contribute to innovation and dampen the concentration tendencies in the media markets’.^ The animating policy concerns are vividly captured by Neelie Kroes, the Commissioner responsible at the time for Competition, who noted that:

This decision benefits both football fans and the game. Fans benefit from new products and greater choice. Leagues and clubs benefit from the increased coverage of their games. Readily available premium content such as top football boosts innovation and growth in the media [1] [2]

and information technology sectors. Moreover, open markets and access to content are an essential safeguard against media concentration.[3] [4] [5]

The Commission did not make explicit whether it treated the matter as beyond the scope of Article 101(1) TFEU or instead within the criteria of exemption set out in Article 101(3), but in practice the Decision adds to the store of understanding of what is permitted in the process of selling rights in markets for sports broadcasting.

Collective selling of rights to broadcast matches in the English Premier League (FAPL) has similarly been handled in the light of Champions League. It was explained earlier that money has cascaded into English football as a result of its appeal to broadcasters and ultimately to viewers. The rights for the period 2016 to 2019 cost just over ?5 billion; ?3 billion was the price charged for 2013 to 2016; ?1.8 billion for 2010 to 2013; ?1.7 billion for 2007 to 2010; and so on. The attentive reader will now have grasped why the deals span a three-year period: it is the influence of EU competition law and, in particular, the anxiety to prevent undue foreclosure of access to premium content in broadcasting markets. Moreover, the identity of the buyers of rights is in part influenced by the requirement to navigate the channel set by EU competition law. The package sold by the FAPL embraces rights for live radio broadcast, rights for use on other audiovisual media, and rights to show matches on a deferred basis (this is the source of the BBC’s long-standing Saturday evening programme Match of the Day) but the jewel in the crown is undoubtedly the right to televise matches live. Under the 2004—07 deal (and earlier ones) the purchasing broadcaster of rights to show live matches was BSkyB, a subscription-only channel which became SKY in 2014. Its determination to acquire exclusive rights to show live matches in the FAPL was readily explained by its need to secure content that would attract a large body of paying viewers. The Commission, anxious about the damaging effect on actual and potential competition in broadcasting markets, opened an investigation in 2001. An extended period of protracted and occasionally acrimonious negotiation^ ensued and a number of commitments were made by the Premier League with a view to securing a green light, which was eventually forthcoming in 20067°5 The Commission aligned its analysis explicitly with its Decisions in Champions League and Bundesliga. So it once again found that the rights to broadcasting premium football events played regularly through the season constitutes a distinct relevant product market. The geographical market was the UK market alone: the Commission noted once again that markets for media rights are usually defined on the basis of national or linguistic criteria. The Commission focused on the grant to the FAPL of sole and exclusive rights to sell as the main problem. This replaces a competitive market populated by many (twenty) suppliers with instead a single organization: ‘markets that would be demand-led thus become supply-driven’.[6] [7] [8] [9] The tendency to sell large packages of rights on an exclusive basis creates damage in downstream markets by raising barriers to entry, especially if there is only a single buyer. It is clear that once again the underlying primary concern is not sport but broadcasting: the link is the huge value of sports rights to broadcasters seeking to acquire a presence in such markets. The changes made according to the adapted commitments of the FAPL, explained previously, included increased output (the availability of an increased number of matches and the availability of a wider range of rights, including those pertaining not only to television but also to mobile phones and the internet), the sale of six packages of rights to show matches on live television that would not be purchasable by a single buyer (though buying five out of six was possible)^7 the splitting of the sale of UK and Irish rights, sale on a transparent and non-discriminatory tendering basis, and agreement that the duration of agreements would not exceed three years.

The anxiety to prevent a monopoly, albeit one limited in time, that will tend to make the market rigid is evident. In fact, BskyB, which became SKY in 2014, retained its grip on the lion’s share of matches. In the first sale of rights following the Commission intervention it bought four of the six packages while two were acquired by an Irish-based broadcaster, Setanta. Setanta, however, appears to have over-estimated its ability to exploit the rights it had bought: in 2009 its British arm was placed into administration and it no longer exists. Today there are two principal broadcasters of live matches played in the FAPL, SKY and BT, and the number of matches shown live has also increased.Under the three-year deal that commenced in 2016, live FAPL games are regularly shown on Friday evening, Saturday lunchtime, and Saturday early evening, at several points on a Sunday, including the prized 4 pm slot which SKY has retained throughout the process, and on Monday evening. It is only at 3 pm on a Saturday afternoon that live FAPL matches are not screened in the United Kingdom, as a result of the UEFA rule that a window may be kept in place where televised football is blocked in order to encourage fans to attend matches in person.109 Obviously, however, the increase in output of matches to be shown live at other times, which has characterized each new three-year deal, has the consequence that only a minority of FAPL games kick off at 3 pm on a Saturday in any event. It is, moreover, not difficult for any fan to find a way to watch a match live on the internet or in a pub even at 3 pm on a Saturday, given the technological difficulties involved in blocking feeds of a live match shown on a channel under the FAPL’s deal to sell rights to markets outside the United Kingdom.

How far, if at all, the system truly improves the consumer’s lot has been questioned. The Commission’s early interventions had minimal impact on SKY’s dominance in pay-TV sports markets.[10] [11] [12] [13] It has been argued that the Commission’s practice makes little inquiry into how changes in the patterns of supply have in fact affected the viewer.m The committed sports fan now has to buy two subscription packages, from both SKY and BT, not just one. The sale of rights in 2015 suggests that the turgidly slow increase in actual or potential competition on the demand- side is driving up prices extracted by the seller of collective rights, able to exploit the supply-side market power granted by the restriction on competition that is the consequence of collective action. This immediately led to price increases for the ultimate consumer too.112 Perhaps, then, the limited success in fostering competition in the broadcasting sector, combined with willingness to endorse collective selling, comes at the expense of the consumer of live televised football.

In summary, the collective selling of rights to broadcast sports events on terms that include conferral of exclusivity on the buyer is capable of being structured in a way that complies with the demands of EU competition law. The EU does not set rules on how rights shall be sold. Instead it simply determines whether arrangements crafted by governing bodies and broadcasters are compatible with EU law and prohibits those that are not. In practice, however, the developing practice of the Commission serves to channel the available options and, as has also been observed in relation to matters such as the transfer system (Chapter 9) and Financial Fair Play (Chapter 10.9), the Commission is an influential actor.n3 Deals in practice typically follow common patterns which are shaped by the Commission’s view of what must accompany collective selling of exclusive rights in order to evade condemnation as anti-competitive. Exclusivity must be time-limited, with three years emerging as the industry standard provoked by the Commission; tendering processes must be open, transparent, and non-discriminatory; there must be multiple and divisible packages of rights, as a means to maximize the number of buyers able to enjoy the benefit of premium sports content across the enormous and (helpfully) increasing range of feasible media. This approach, pioneered in Champions League, has set the tone and the pattern of sale of broadcasting rights within the EU. Collective selling on this model is the norm, both by UEFA in selling rights to the Champions League and, with effect from 2014, in selling rights not only to the Finals but also the qualifying stages for its EURO competition for national representative teams, and for national Leagues. There is no attempt here to offer an exhaustive survey of practice.[14] [15]

  • [1] 6 Gesetz gegen Wettbewerbsbeschraenkungen, s 31 as amended with effect from 1 January 1999. 97 Re the supply of services facilitating the broadcasting on television of Premier League football matches [1999] UKCLR 258. 98 COMP/C.2/37.214, Dec 2005/396 Joint selling of the media rights to the German Bundesliga[2005] OJ L134/46. 99 ibid para 23. ioo ibid para 19. 101 Subsequently the power of a single buyer to acquire all rights has been removed: accessed 29 November 2016.
  • [2] 2 Bundesliga (n 98) para 41.
  • [3] IP/05/62, 19 January 2005.
  • [4] eg ‘Sky and Brussels At War over Premiership Rights’ The Observer (London, 11 September2005) Business section, 1.
  • [5] COMP 38.173 Joint selling of the media rights to the FA Premier League, 22 March 2006: summary of Commission Decision at [2008] OJ C7/18.
  • [6] ibid para 25. Ю7 cf n 101 on requiring more than one buyer of Bundesliga rights.
  • [7] 108 This increase was one reason for OFCOM’s decision pursuant to the UK’s Competition Act
  • [8] 1998 not to proceed with a complaint by Virgin Media about output restrictions: CW/01138/09/14 Virgin Media accessed 29 November 2016.
  • [9] 109 Comm Dec 2001/478 UEFA’s Broadcasting Regulations [2001] OJ L171/12. See Ch 6.4.
  • [10] For criticism of the Commission’s assumptions, see D Harbord and S Szymanski, ‘Football Trials’[2004] ECLR 117; D Geey and M James, ‘The Premier League-European Commission BroadcastingNegotiations’ (2006) 4 ESLJ, available via accessed 29 November 2016.
  • [11] eg K Lefever and B Van Rompuy, ‘Ensuring Access to Sports Content: 10 Years of EUIntervention. Time to Celebrate?’ (2009) 2 Journal of Media Law 243, 255—59.
  • [12] See n 7.
  • [13] That the Commission works with governing bodies to become a ‘co-producer’ of norms is animportant theme sustained in A Duval, ‘La Lex Sportiva Face au Droit de l’Union Europeenne: Guerreet Paix dans l’Espace Juridique Transnational’ PhD thesis defended at the EUI Florence (September2015), available via accessed 29 November 2016.
  • [14] The European Competition Law Review frequently carries short notes addressing national practice: eg ‘Romania’ [2015] ECLR N-69. So does the International Sports Law Journal, eg ‘Netherlands’(2004) 4(1—2) Intl Sports LJ 63. See also Lefever (n 20) ch 9; Van Rompuy (n 94) chs 5 and 6,especially at 343—59; S Moya Izquierdo and M Troncoso Ferrer, ‘Football Broadcasting Business inthe EU: Towards Fairer Competition?’ (2014) 5 Journal of European Competition Law and Practice353. There are 29 country reports in I Blackshaw, S Cornelius, and R Siekmann (eds), TV Rights andSport: Legal Aspects (TMC Asser 2009).
  • [15] Champions League (n 34) paras 164—67.
 
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